Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
14th Edition
ISBN: 9781337541398
Author: Carl Warren; James M. Reeve; Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 7, Problem 13E
(A)
To determine
Prepare the production budget and direct labor cost budget of Company L.
(A)
Expert Solution
Explanation of Solution
The following table shows the production budget for D and 501 J.
| Company L | ||
| Production Budget | ||
| For the Month Ending May 31 | ||
| Particulars | Units | |
| D | 501 J | |
| Expected units to be sold | 23,600 | 53,100 |
| Add: Desired inventory, June 30 | 420 | 1,860 |
| Total Units Required | 24,020 | 54,960 |
| Less: Estimated Inventory, June 1 | (670) | (1,660) |
| Total Units To Be Produced | 23,350 | 53,300 |
Table (1)
Conclusion
Therefore, the total units to be produced for “D” and 501 “J” are 23,350 and 53,300 respectively.
(B)
To determine
Prepare the direct labor cost budget of Company L.
(B)
Expert Solution
Explanation of Solution
The following table shows the direct labor cost budget for inseam, outer-seam, pockets, and zipper.
| Company L | ||||
| Direct Labor Cost Budget | ||||
| For the Month Ending May 31 | ||||
| Particulars | Inseam | Outer-seam | Pockets | Zipper |
| Minutes Required For Production: | ||||
| D | 42,030 (1) | 46,700 (2) | 14,010 (3) | 28,020 (4) |
| 501 J | 47,970 (5) | 74,620 (6) | 47,970 (7) | 31,980 (8) |
| Total Minutes (A) | 90,000 | 121,320 | 61,980 | 60,000 |
| Total Hours Required (B) = (A)/60 | 1,500 | 2,022 | 1,033 | 1,000 |
| Hourly Rate (C) | $13 | $13 | $15 | $15 |
| Total (B) × (C) | $19,500 | $26,286 | $15,495 | $15,000 |
| Total Direct Labor Cost | 76,281 | |||
Table (1)
Working Notes:
(1) Calculate the minutes required for the production of D in inseam.
(2) Calculate the minutes required for the production of D in outer-seam.
(3) Calculate the minutes required for the production of D in pockets.
(4) Calculate the minutes required for the production of D in zipper.
(5) Calculate the minutes required for the production of 501 J in inseam.
(6) Calculate the minutes required for the production of 501 J in outer-seam.
(7) Calculate the minutes required for the production of 501 J in pockets.
(8) Calculate the minutes required for the production of 501 J in zipper.
Therefore, the total direct labor cost is $76,281.
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Production and direct labor cost budgets Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers® and501®Jeans. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 Jeans shows estimated sales of 23,600 and 53,100 pairs, respectively, for May. The finished goods inventory is assumed as follows:
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Two-Leg Company manufactures slacks and jeans under a variety of brand names, such as Kickers and 101 Denims. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Kickers and 101 Denims shows estimated sales of 21,610 and 41,710 pairs, respectively, for May. The finished goods inventory is assumed as follows:
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Chapter 7 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
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