Question

Direct Materials Purchases Budget: Direct Labor Budget

Crescent Company produces stuffed toy animals; one of these is “Arabeau the Cow.” Each Arabeau takes 0.20 yard of fabric (white with irregular black splotches) and 8 ounces of polyfiberfill. Fabric costs $3.40 per yard and polyfiberfill is $0.05 per ounce. Crescent has budgeted production of Arabeaus for the next four months as follows:

    Units
October   44,000
November   90,000
December   50,000
January   40,000
Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 20 percent of the following month’s production needs and sufficient polyfiberfill be in inventory to satisfy 40 percent of the following month’s production needs. Inventory of fabric and polyfiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy.

Each Arabeau produced requires (on average) 0.10 direct labor hour. The average cost of direct labor is $15 per hour.

Required:

1. Prepare a direct materials purchases budget of fabric for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total. Round your answers to the nearest cent, if required.

Crescent Company
Direct Materials Purchases Budget for Fabric
For the Fourth Quarter
October   November   December   Total
Units produced   fill in the blank 2a228b0e203406b_1
fill in the blank 2a228b0e203406b_2
fill in the blank 2a228b0e203406b_3
fill in the blank 2a228b0e203406b_4
DM per unit (yd.)   fill in the blank 2a228b0e203406b_5
fill in the blank 2a228b0e203406b_6
fill in the blank 2a228b0e203406b_7
fill in the blank 2a228b0e203406b_8
Production needs   fill in the blank 2a228b0e203406b_9
fill in the blank 2a228b0e203406b_10
fill in the blank 2a228b0e203406b_11
fill in the blank 2a228b0e203406b_12
Desired ending inventory (yd.)   fill in the blank 2a228b0e203406b_13
fill in the blank 2a228b0e203406b_14
fill in the blank 2a228b0e203406b_15
fill in the blank 2a228b0e203406b_16
Total needed   fill in the blank 2a228b0e203406b_17
fill in the blank 2a228b0e203406b_18
fill in the blank 2a228b0e203406b_19
fill in the blank 2a228b0e203406b_20
Less: Beginning inventory   fill in the blank 2a228b0e203406b_21
fill in the blank 2a228b0e203406b_22
fill in the blank 2a228b0e203406b_23
fill in the blank 2a228b0e203406b_24
DM to be purchased (yd.)   fill in the blank 2a228b0e203406b_25
fill in the blank 2a228b0e203406b_26
fill in the blank 2a228b0e203406b_27
fill in the blank 2a228b0e203406b_28
Cost per yard   $fill in the blank 2a228b0e203406b_29
$fill in the blank 2a228b0e203406b_30
$fill in the blank 2a228b0e203406b_31
$fill in the blank 2a228b0e203406b_32
Total purchase cost   $fill in the blank 2a228b0e203406b_33
$fill in the blank 2a228b0e203406b_34
$fill in the blank 2a228b0e203406b_35
$fill in the blank 2a228b0e203406b_36
2. Prepare a direct materials purchases budget of polyfiberfill for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total. Round your answers to the nearest cent, if required.

Crescent Company
Direct Materials Purchases Budget for Polyfiberfill
For the Fourth Quarter
October   November   December   Total
Units produced   fill in the blank 5a60cffb1fdd00c_1
fill in the blank 5a60cffb1fdd00c_2
fill in the blank 5a60cffb1fdd00c_3
fill in the blank 5a60cffb1fdd00c_4
DM per unit (oz.)   fill in the blank 5a60cffb1fdd00c_5
fill in the blank 5a60cffb1fdd00c_6
fill in the blank 5a60cffb1fdd00c_7
fill in the blank 5a60cffb1fdd00c_8
Production needs   fill in the blank 5a60cffb1fdd00c_9
fill in the blank 5a60cffb1fdd00c_10
fill in the blank 5a60cffb1fdd00c_11
fill in the blank 5a60cffb1fdd00c_12
Desired ending inventory (oz.)   fill in the blank 5a60cffb1fdd00c_13
fill in the blank 5a60cffb1fdd00c_14
fill in the blank 5a60cffb1fdd00c_15
fill in the blank 5a60cffb1fdd00c_16
Total needed   fill in the blank 5a60cffb1fdd00c_17
fill in the blank 5a60cffb1fdd00c_18
fill in the blank 5a60cffb1fdd00c_19
fill in the blank 5a60cffb1fdd00c_20
Less: Beginning inventory   fill in the blank 5a60cffb1fdd00c_21
fill in the blank 5a60cffb1fdd00c_22
fill in the blank 5a60cffb1fdd00c_23
fill in the blank 5a60cffb1fdd00c_24
DM to be purchased (oz.)   fill in the blank 5a60cffb1fdd00c_25
fill in the blank 5a60cffb1fdd00c_26
fill in the blank 5a60cffb1fdd00c_27
fill in the blank 5a60cffb1fdd00c_28
Cost per ounce   $fill in the blank 5a60cffb1fdd00c_29
$fill in the blank 5a60cffb1fdd00c_30
$fill in the blank 5a60cffb1fdd00c_31
$fill in the blank 5a60cffb1fdd00c_32
Total purchase cost   $fill in the blank 5a60cffb1fdd00c_33
$fill in the blank 5a60cffb1fdd00c_34
$fill in the blank 5a60cffb1fdd00c_35
$fill in the blank 5a60cffb1fdd00c_36
3. Prepare a direct labor budget for the last quarter of the year showing the hours needed and the direct labor cost for each month and for the quarter in total. Round your answers to the nearest cent, if required.

Crescent Company
Direct Labor Budget
For the Fourth Quarter
October   November   December   Total
Units produced   fill in the blank 52ceb501bfb3ff0_1
fill in the blank 52ceb501bfb3ff0_2
fill in the blank 52ceb501bfb3ff0_3
fill in the blank 52ceb501bfb3ff0_4
Direct labor time per unit (hours)   fill in the blank 52ceb501bfb3ff0_5
fill in the blank 52ceb501bfb3ff0_6
fill in the blank 52ceb501bfb3ff0_7
fill in the blank 52ceb501bfb3ff0_8
Direct labor hours needed   fill in the blank 52ceb501bfb3ff0_9
fill in the blank 52ceb501bfb3ff0_10
fill in the blank 52ceb501bfb3ff0_11
fill in the blank 52ceb501bfb3ff0_12
Cost per direct labor hour   $fill in the blank 52ceb501bfb3ff0_13
$fill in the blank 52ceb501bfb3ff0_14
$fill in the blank 52ceb501bfb3ff0_15
$fill in the blank 52ceb501bfb3ff0_16
Total direct labor cost   $fill in the blank 52ceb501bfb3ff0_17
$fill in the blank 52ceb501bfb3ff0_18
$fill in the blank 52ceb501bfb3ff0_19
$fill in the blank 52ceb501bfb3ff0_20

Answer 1

Direct Material Purchases Budget for FABRIC
	October	November	December	Total
Units produced	44,000.00	90,000.00	50,000.00	1,84,000.00
DM per unit	0.2 yards	0.2 yards	0.2 yards
Production Needs	8,800.00	18,000.00	10,000.00	36,800.00
Desired Ending Inventory	3,600.00	2,000.00	1,600.00	7,200.00
Total Needed	12,400.00	20,000.00	11,600.00	44,000.00
Less: Beginning Inventory	-	3,600.00	2,000.00	5,600.00
DM to be Purchased	12,400.00	16,400.00	9,600.00	38,400.00
Cost per Yard	$         3.40	$           3.40	$         3.40
Total Purchase Cost	$ 42,160.00	$   55,760.00	$ 32,640.00	1,30,560.00

Direct Material Purchases Budget for POLYFIBERFILL
	October	November	December	Total
Units produced	44,000.00	90,000.00	50,000.00	1,84,000.00
DM per unit	8 Oz	8 Oz	8 Oz
Production Needs	3,52,000.00	7,20,000.00	4,00,000.00	14,72,000.00
Desired Ending Inventory	2,88,000.00	1,60,000.00	1,28,000.00	5,76,000.00
Total Needed	6,40,000.00	8,80,000.00	5,28,000.00	20,48,000.00
Less: Beginning Inventory	-	2,88,000.00	1,60,000.00	4,48,000.00
DM to be Purchased	6,40,000.00	5,92,000.00	3,68,000.00	16,00,000.00
Cost per Oz	$         0.05	$           0.05	$         0.05
Total Purchase Cost	$ 32,000.00	$   29,600.00	$ 18,400.00	80,000.00

Direct Labour Budget
	October	November	December	Total
Units produced	44,000.00	90,000.00	50,000.00	1,84,000.00
DL per unit	0.10 hours	0.10 hours	0.10 hours
DL hours needed	4,400.00	9,000.00	5,000.00	18,400.00
Cost per DL	$       15.00	$         15.00	$       15.00
Total Purchase Cost	$ 66,000.00	$1,35,000.00	$ 75,000.00	2,76,000.00