Question

Ornamental Sculptures Mfg. manufactures garden sculptures. Each sculpture requires 8 pounds of direct materials at a cost of $3 per pound and 0.4 direct labor hours at a rate of $16 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed manufacturing overhead is $3,300 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 4,780 pounds of direct materials in inventory. The company’s production budget reports the following.

Production Budget	March		April		May
Units to be produced	4,100		4,900		5,300

(1) Prepare direct materials budgets for March and April.
(2) Prepare direct labor budgets for March and April.
(3) Prepare factory overhead budgets for March and April.

Complete this question by entering your answers in the tabs below.

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

Prepare direct labor budgets for March and April. (Round "DL hours required per unit" answers to two decimal places.)

	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

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. Direct material budget:

ORNAMENTAL SCULPTURES MFG

Direct Materials Budget

Details March April Budgeted Production (units) 4,100 4,900 Materials requirement per unit (lbs.) 8 8 Materials needed for production (lbs.) 32,800 39,200 Add: Budgeted ending Inventory (lbs.) (April ending inventory = (5,300*8*30%) 11,760 12,720 Total Materials Requirements (lbs.) 44,560 51,920 Less: Budgeted beginning Inventory (lbs.) (March month ending inventory is April beginning inventory) 4,780 11,760 Materials to be purchased (lbs.) 39,780 40,160 Direct Materials cost per lb. $3 $3 Total Budgeted Direct materials $119,340 $120,480

• 2. Direct Labor budget:

ORNAMENTAL SCULPTURES MFG

Direct Labor Budget

Details March April Budgeted Production (units) 4,100 4,900 Direct Labor Hours required per unit 0.4 0.4 Total direct labor hours needed 1,640 1,960 Direct Labor rate per hour $16 $16 Total Budgeted direct labor $26,240 $31,360

• 3. Factory Overhead budget

ORNAMENTAL SCULPTURES MFG

Factory overhead Budget

Details March April Total direct labor hours needed 1,640 1,960 Variable OH rate per DL hour $3 $3 Budgeted Variable Overhead $4,920 $5,880 Budgeted Fixed Overhead $3,300 $3,300 Total Budgeted factory Overhead $8,220 $9,180