MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hour at a rate of $11 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $11,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's direct materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The company's production budget reports the following. 4,600 October 6,900 November 5,900 Production Budget September Units to produce (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. Complete this question by entering your answers in the tabs below.

MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hour at a rate of $11 per hour. Variable overhead is budgeted at a rate of $2 per direct labor hour. Budgeted fixed overhead is $11,000 per month. The company's policy is to end each month with direct materials inventory equal to 40% of the next month's direct materials requirement. At the end of August the company had 3,680 pounds of direct materials in inventory. The company's production budget reports the following. 4,600 October 6,900 November 5,900 Production Budget September Units to produce (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. Complete this question by entering your answers in the tabs below.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter9: Standard Costing: A Functional-based Control Approach

Section: Chapter Questions

Problem 33P: Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of...

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