Question - Production Budget and Direct Labor Cost Budgets
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 38,720 pairs, respectively, for March 2012. The finished goods inventory is assumed as follows:
|
Kickers
|
101 Denims
|
|
March 1 estimated inventory
|
970
|
1,090
|
|
March 31 desired inventory
|
360
|
1,370
|
Assume the following direct labor data per 10 pairs of Kickers and 101 Denims for four different sewing operations:
|
Direct Labor per 10 Pairs
|
|
Kickers
|
101 Denims
|
|
Inseam
|
21 minutes
|
14 minutes
|
|
Outerseam
|
25
|
17
|
|
Pockets
|
8
|
10
|
|
Zipper
|
12
|
7
|
|
Total
|
66 minutes
|
48 minutes
|
a. Prepare a production budget for March.
b. Prepare the March direct labor cost budget for the four sewing operations, assuming a $13.00 wage per hour for the inseam and outerseam sewing operations and a $18.00 wage per hour for the pocket and zipper sewing operations.