Question

Check my work Required information Ramos Co. provides the following sales forecast and production budget for the next four months. Sales (units) Budgeted production (units) April 560 500 May 640 630 Dune 590 600 660 600 The company plans for finished goods inventory of 180 units at the end of June. In addition, each finished unit requires 6 pounds of direct materials and the company warſts to end each month with direct materials inventory equal to 25% of next month's production needs. Beginning direct materials inventory for April was 750 pounds. Direct materials cost $3 per pound. Each finished unit requires 0.20 hours of direct labor at the rate of $22 per hour. The company budgets variable overhead at the rate of $26 per direct labor hour and budgets fixed overhead of $8,600 per month. 1. Prepare a direct labor budget for April, May, and June. 2. Prepare a factory overhead budget for April, May, and June. < Prev 3 of 16 Next > 85% 10:35 AM 101724/2019 ch 'o Le @ BL 9

Answer 1

Direct Labor Cost Budget
Budgeted Direct Labor Cost
	April	May	June
Budgeted Production Units	500	630	600	Units
Direct Labor Hour per unit	0.2	0.2	0.2	Hours per unit
Total Labor Hours Needed	100	126	120	Total Hours
Labor Rate per hour	$ 22.00	$ 22.00	$ 22.00	Rate per unit
Budgeted Direct Labor Cost	$ 2,200	$ 2,772	$ 2,640	Total Rate
Factory Overhead Budget
Factory Overhead Budget
	April	May	June
Total labor hours needed (as per direct labor budget)	100	126	120
Budgeted Variable Overhead Rate per Hour	$             26	$             26	$             26
Budgeted Variable Overhead	$        2,600	$        3,276	$        3,120
Budgeted Fixed Overhead	$        8,600	$        8,600	$        8,600
Total Budgeted factory overhead	$      11,200	$      11,876	$      11,720

Direct Labor Cost Budget
Budgeted Direct Labor Cost
	April	May	June
Budgeted Production Units	500	630	600	Units
Direct Labor Hour per unit	0.2	0.2	0.2	Hours per unit
Total Labor Hours Needed	=B4*B5	=C4*C5	=D4*D5	Total Hours
Labor Rate per hour	22	22	22	Rate per unit
Budgeted Direct Labor Cost	=B6*B7	=C6*C7	=D6*D7	Total Rate
Factory Overhead Budget
Factory Overhead Budget
	April	May	June
Total labor hours needed (as per direct labor budget)	=B6	=C6	=D6
Budgeted Variable Overhead Rate per Hour	26	26	26
Budgeted Variable Overhead	=B13*B14	=C13*C14	=D13*D14
Budgeted Fixed Overhead	8600	8600	8600
Total Budgeted factory overhead	=SUM(B15:B16)	=SUM(C15:C16)	=SUM(D15:D16)