Question

1. Pasadena Candle Inc. budgeted production of 45,000 candles for January. Each candle requires molding. Assume that two minutes are required to mold each candle. If molding labor costs $13 per hour, determine the direct labor cost budget for January.

Round total direct labor cost to the nearest dollar, if required.

Pasadena Candle Inc. Direct Labor Cost Budget For the Month Ending January 31
Hours required for assembly:
Candles				min.
Convert minutes to hours		÷		min.
Molding hours				hrs.
Hourly rate		×	$
Total direct labor cost			$

2. Healthy Measures Inc. produces a Bath and Gym version of its popular electronic scale. The anticipated unit sales for the scales by sales region are as follows:

	Bath Scale		Gym Scale
Northern Region unit sales	23,100		37,200
Southern Region unit sales	24,900		26,100
Total	48,000		63,300

The finished goods inventory estimated for March 1, for the Bath and Gym scale models is 1,600 and 2,100 units, respectively. The desired finished goods inventory for March 31 for the Bath and Gym scale models is 1,200 and 2,300 units, respectively.

Prepare a production budget for the Bath and Gym scales for the month ended March 31. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Healthy Measures Inc.
Production Budget
For the Month Ending March 31
	Units Bath Scale	Units Gym Scale
Expected units to be sold
Desired inventory, March 31
Total units available
Estimated inventory, March 1
Total units to be produced

3. Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows:

	Junior	Pro Striker
Production budget	7,800 units	19,800 units

Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:

	Forming Department	Assembly Department
Junior	0.20 hour per unit	0.50 hour per unit
Pro Striker	0.30 hour per unit	0.75 hour per unit

The direct labor rate for each department is as follows:

Forming Department	$19.00 per hour
Assembly Department	$9.00 per hour

Prepare the direct labor cost budget for July.

Ace Racket Company
Direct Labor Cost Budget
For the Month Ending July 31
	Forming Department	Assembly Department
Hours required for production:
Junior
Pro Striker
Total
Hourly rate	x$	x$
Total direct labor cost	$	$

4. Sweet Tooth Candy Company budgeted the following costs for anticipated production for August:

Advertising expenses	$297,740
Manufacturing supplies	16,320
Power and light	48,670
Sales commissions	325,330
Factory insurance	28,340
Production supervisor wages	143,150
Production control wages	37,220
Executive officer salaries	303,470
Materials management wages	40,930
Factory depreciation	23,190

Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

Sweet Tooth Candy Company
Factory Overhead Cost Budget
For the Month Ending August 31
Variable factory overhead costs:
Manufacturing supplies	$
Power and light
Production supervisor wages
Production control wages
Materials management wages
Total variable factory overhead costs		$
Fixed factory overhead costs:
Factory insurance	$
Factory depreciation
Total fixed factory overhead costs
Total factory overhead costs		$

Answer 1

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Part 1
Hours required for assembly:
Candles	45,000*2 Minutes		90,000.00	min.
Convert minutes to hours		÷	60.00	min.
Molding hours			1,500.00	hrs.
Hourly rate		×	$                 13
Total direct labor cost			$   19,500.00
Part 2
	Units Bath Scale	Units Gym Scale
Expected units to be sold	48,000	63,300
Desired inventory, March 31	1,200	2,300
Total units available	49,200	65,600
Estimated inventory, March 1	-1,600	-2,100
Total units to be produced	47,600	63,500
Part 3
	Forming Department	Assembly Department
Hours required for production:
Junior	1,560.00	3,900.00
Pro Striker	5,940.00	14,850.00
Total	7,500.00	18,750.00
Hourly rate	$                                       19	$                                            9
Total direct labor cost	$                            142,500	$                               168,750
Part 4
Variable factory overhead costs:
Manufacturing supplies	$                               16,320
Power and light	$                               48,670
Production supervisor wages	$                            143,150
Production control wages	$                               37,220
Materials management wages	$                               40,930
Total variable factory overhead costs		$                               286,290
Fixed factory overhead costs:
Factory insurance	$                               28,340
Factory depreciation	$                               23,190
Total fixed factory overhead costs		$                                  51,530
Total factory overhead costs		$                               337,820