Production and Direct labor cost budgets
Two-leg company manufactures slacks and jeans under a variety of brand names, such as Dockers and 501 jeans . Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 jeans show estimated sales of 37,050 and80,430 pairs, respectively, for May. The finished goods inventory is assumed as follows:
Dockers. 501 Jeans
May 1 estimated inventory. 1,660. 2,270
May 31 desired inventory. 610. 2,840
Assume the following direct labor data per 10 pairs of dockers and 501 jeans for four different sewing operations:
Direct Labor per 10 Pair
Dockers. 501 Jeans
Inseam. 21minutes. 14 minutes
Outerseam. 25. 17
Pockets. 8. 10
Zipper. 12. 7
Total. 66 minutes. 48 minutes
a. Prepare a production budget for May. Prepare the budget in two columns: dockers and 501 jeans. For those boxes in which you must entersubtracted or negative numbers use a minus sign.
Two Leg Company Production Budget
For the month Ending May 31 (assume data)
Expected units to be sold. Dockers. 501 jeans
__________________
Total units available
Total to be produced
b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $12 wage per hour for the Insham and outerseam sewing operations and a $19 wage per hour for the pocket and zipper sewing operations. Prepare the direct labor cost budget in for columns: inseam, outerseam, pockets, and zipper.
Two-Leg Company
Direct Labor Cost Budget
For Month Ending May 31 (assumed data)
Inseam. Outerseam. Pockets. Zipper. Total
Dockers
501 jeans
Total minutes
Total direct labor hours
Direct labor rates. X$. X $. X $. X $
Total direct labor cost. $. $. $. $. $
Solution a:
| Production
Budget For the month ended May 31 |
||
| Particulars | Dockers | 501 Jeans |
| Budgeted sales units | 37050 | 80430 |
| Add: Desired ending inventory | 610 | 2840 |
| Total Unit Available | 37660 | 83270 |
| Less: Beginning Inventory | 1660 | 2270 |
| Total to be produced | 36000 | 81000 |
Solution b:
| Direct Labor Cost
Budget For the month ended May 31 |
|||||
| Particulars | Inseam | Outerseam | Pockets | Zipper | Total |
| Time required for Production of Dockers (In minutes) | 75600 | 90000 | 28800 | 43200 | 237600 |
| Time required for Production of 501 Jeans (In minutes) | 113400 | 137700 | 81000 | 56700 | 388800 |
| Total Minutes | 189000 | 227700 | 109800 | 99900 | 626400 |
| Total direct labor hours | 3150 | 3795 | 1830 | 1665 | 10440 |
| Direct labor rate per hour | $12.00 | $12.00 | $19.00 | $19.00 | |
| Total direct labor cost | $37,800.00 | $45,540.00 | $34,770.00 | $31,635.00 | $149,745.00 |
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