Question

Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 8 pounds of direct materials at a cost of $4 per pound and 0.4 direct labor hours at a rate of $18 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed manufacturing overhead is $4,900 per month. The company’s policy is to maintain direct materials inventory equal to 30% of the next month’s materials requirement. At the end of February the company had 5,780 pounds of direct materials in inventory. The company’s production budget reports the following.

Production Budget	March		April		May
Units to be produced	3,600		4,700		5,400

(1) Prepare direct materials budgets for March and April.

ORNAMENTAL SCULPTURES MFG. Direct Materials Budget For the Months of March and April March April Budgeted production (units) Materials requirements per unit (lbs.) Materials needed for production (lbs.) 0 0 Budgeted ending inventory (lbs.) Total materials requirements (lbs.) 0 0 Budgeted beginning inventory (lbs.) Materials to be purchased (lbs.) 0 0 Direct material cost per lb. Total budgeted direct materials $0 $0

(2) Prepare direct labor budgets for March and April

	ORNAMENTAL SCULPTURES MFG. Direct Labor Budget For the Months of March and April March April Budgeted production (units) DL hours required per unit Total direct labor hours needed 0 0 Direct labor rate per hour Total budgeted direct labor $0 $0

(3) Prepare factory overhead budgets for March and April.

	ORNAMENTAL SCULPTURES MFG. Factory Overhead Budget For the Months of March and April March April Total direct labor hours needed VOH rate per DL hour Budgeted variable overhead $0 $0 Budgeted fixed overhead Total budgeted factory overhead $0 $0

Answer 1

1	ORNAMENTAL SCULPTURES MFG.
	Direct Materials Budget
	For the Months of March and April
		March	April
	Budgeted production (units)	3,600	4,700
	Materials requirements per unit (lbs.)	8	8
	Materials needed for production (lbs.)	28,800	37,600
	Budgeted ending inventory (lbs.)	11,280	12,960
	Total materials requirements (lbs.)	40,080	50,560
	Budgeted beginning inventory (lbs.)	5,780	11,280
	Materials to be purchased (lbs.)	34,300	39,280
	Direct material cost per lb.	$4	$4
	Total budgeted direct materials	$137,200	$157,120
2	ORNAMENTAL SCULPTURES MFG.
	Direct Labor Budget
	For the Months of March and April
		March	April
	Budgeted production (units)	3,600	4,700
	DL hours required per unit	0.4	0.4
	Total direct labor hours needed	1,440	1,880
	Direct labor rate per hour	$18	$18
	Total budgeted direct labor	$25,920	$33,840
3	ORNAMENTAL SCULPTURES MFG.
	Factory Overhead Budget
	For the Months of March and April
		March	April
	Total direct labor hours needed	1,440	1,880
	VOH rate per DL hour	$3	$3
	Budgeted variable overhead	$4,320	$5,640
	Budgeted fixed overhead	$4,900	$4,900
	Total budgeted factory overhead	$9,220	$10,540