Question

illuminate Corporation manufactures and sella two types of decorative lampa, Knox and Ayer. It expects to manufacture 26,000 Knox lamps and 14,000 Ayer lampa in 2017. The following data are available for the year 2017. (Click the icon to view the information.) (Click the icon to view the December 31, 2017 preduction budget in units.) Calculate (a) the direct materials usage budget in quantity and dollars (label it Schedule 3AX: (b) the direct materials purchase budget in quantity and dollars (label it Schedule 38), and (c) the direct manufacturing labor costs budget (label it Schedule 4) for the year ending December 31, 2017. 1: Data Table Direct materials Metal 2 per pound (same as in 2016) Fabrie $ 3 per yard (nes in 2016) Direct manufacturing labor $ 15 per hour Content of Each Product Unit Product Knox Ayer Metal 1 pound 2 pounds Fabric 1 yard 3 yards Direct manufacturing labor 0.2 hours 0.25 hours yang (a). Begin by calculating the direct material usage budget in quantity and then in dollara (label it Schedule 3A) for the year unding December 31, 2017 Schedule 3A: Direct Material Usage Budget in Quantity and Dollara for the Year Ending December 31, 2017 Material Metal Fabric Total Physieal Units Budget Direct materials required for Knoxlar lbs. yar Direct materials required for Ayer lamps Ibs Total quantity of direct materials to be used Ibs. yarda Cont Budget Available from beginning direct materials invertory (under FIFO BOR-ow sumption) Metal Fabric To be purchased and used this period Metal Fabric Direct materials to be used this period (b). Calculate the direct materials purchase budget in quantity and dollars (label it Schedule 3B) for the year ending December 31, 2017. Direct Materials Metal Fabric 3,000 yards Beginning inventory Target ending inventory 14,000 pounds 12,000 pounds 1,000 yards 2: Data Table Ayer 14,000 Schedule 2: Production Budget (in Units) for the Year Ending December 31, 2017 Knox Budgeted units sales 26,000 Add target ending finished goods inventory 2,500 Total required units 28,500 Deduct beginning finished goods Inventory 2,500 Units of finished goods to be produced 26,000 1,500 15,500 1,500 14,000 Schedule 3B: Direet Material Purchases Budget for the Year Ending December 31, 2017 Materials Metal Fabric Total Physical Units Budget To be used in production Ibs yards Add toget ending inventory bes yards Total requirements yards Deduct beginning inventory lbs. yards Purchases to be made bes yards Cost Budget Metal Fabrie Direct materials to be purchased this period (c). Calculate the direct manufacturing labor costs budget (label it Schedule 4) for the year ending December 31, 2017 (Enter the DMLH per unit to two decimal places. Abbreviations used: DMLH - Direct manufacturing laber-hours.) Schedule 4: Direct Manufacturing Labor Costs Budget for the Year Ending December 31, 2017 Output units DMLH Total Hourly produced per unit Total End of hours Knox Ayer Total

Answer 1

Total Fabric Requirement 3A | Direct Material Usage Budget in Quantity and Dollars Material Particulars Metal Physical Units Budget : Direct Materials required for Knox Lamps 26,000 Lbs. Direct Materials required for Ayer Lamps 28,000 Lbs. Total Quantity of Direct Materials to be used 54,000 Lbs. 26,000 Yards 42,000 Yards 68,000 Yards Cost Budget : Available from beginning Direct Materials Inventory (under A FIFO Cost-Flow Assumption) Metal Fabric $ 28,000 $ 9,000 To be purchased and used this Period Metal Fabric Direct Materials to be used this Period $ 80,000 $ $ 195,000 204,000 $ 108,000 $ 312,000

Requirement 3B | Direct Material Purchases Budget Particulars Material Total Metal Fabric Physical Units Budget : To be used in Production Add : Target Ending Inventory Total Requirements Deduct: Beginning Inventory Purchases to be Made 54,000 Lbs. 12,000 Lbs. 66,000 Lbs. 14,000 Lbs. 52,000 Lbs. 68,000 Yards 1,000 Yards 69,000 Yards 3,000 Yards 66,000 Yards $ 2 Cost Budget Metal Fabric Direct Materials to be purchased this Period $ $ $ 104,000 198,000 $ 302,000 Requirement 4 | Direct Manufacturing Labor Costs Budget Particulars Output Units Produced Total Hours Total DMLH per Unit 0.20 0.25 Hourly Wage Rate $ 15$ $ 15 $ $ 5,200 Knox Ayer Total 26,000 14,000 3,500 78,000 52,500 130,500 8,700