Question:
1. Long Beach Tools Corporation has the following direct labor requirements for the production of a machine tool set:
|
Direct Labor
|
Required Time
|
Hourly Rate
|
|
Machining
|
6
|
10
|
|
Assembly
|
10
|
8
|
Forecasted sales for June, July, August, and September are 6,000, 5,000, 8,000, and 7,000 units, respectively. June 1 beginning inventory of the tool set was 1,500. The desired ending inventory each month is one-half of the forecasted sales for the following month.
1. Prepare a production budget for the months of June, July, and August.
2. Develop a direct labor budget for the months of June, July, and August and for each type of direct labor.