Question:
DIRECT MATERIALS PURCHASES BUDGET, DIRECT LABOR BUDGET APO Company produces stuffed toy animals; one of these is "Elliebelle the Cow." Each elliebelle takes 0.20 yard of fabric (white with irregular black splotches) and eight ounces of poly fiberfill. Material costs $3.50 per yard, and poly fiberfill is $0.05 per ounce. APO has budgeted production of ellie belles for the next four months as follows:
|
|
Units
|
|
October
|
42,000
|
|
November
|
90,000
|
|
December
|
50,000
|
|
January
|
40,000
|
Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 20 percent of the following month's production needs and sufficient polyfiberfill be in inventory to satisfy 40 percent of the following month's production needs. Inventory of fabric and polyfiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy.
Each elliebelle produced requires (on average) 0.1 direct labor hour. The average cost of direct labor is $15 per hour.
Required:
1. Prepare a direct materials purchases budget of material for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total.
2. Prepare a direct materials purchases budget of polyfiberfill for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total.
3. Prepare a direct labor budget for the last quarter of the year showing the hours needed and the direct labor cost for each month and for the quarter in total.