Production and Direct Labor Cost Budgets Two-Leg Company manufactures slacks and
ID: 2465281 • Letter: P
Question
Production and Direct Labor Cost Budgets
Two-Leg Company manufactures slacks and jeans under a variety of brand names, such as Kickers and 101 Denims. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Kickers and 101 Denims shows estimated sales of 30,870 and 71,500 pairs, respectively, for March 2016. The finished goods inventory is assumed as follows:
Assume the following direct labor data per 10 pairs of Kickers and 101 Denims for four different sewing operations:
min
Prepare the March direct labor cost budget for the four sewing operations, assuming a $12 wage per hour for the inseam and outerseam sewing operations and a $17 wage per hour for the pocket and zipper sewing operations.
Kickers 101 Denims March 1 estimated inventory 1,380 2,020 March 31 desired inventory 510 2,520Explanation / Answer
Answer :
Two-Leg Company
Direct Labor Cost Budget
March 2016 (assumed data)
Inseam
Outerseam
Pockets
Zipper
Total
Kickers
22
26
8
13
69
101 Denims
15
18
11
7
51
Total minutes
37
44
19
20
120
Total direct labor hours
22*51+15*252
26*51+18*252
8*51+11*252
13*51+7*252
69*51+51*252
Direct labor rate
4902x $12
5862x $12
3180x $17
2427x $17
16371*($12+17)
Total direct labor cost
$58,824
$70,344
$54,060
$41,259
$474,759
Two-Leg Company
Direct Labor Cost Budget
March 2016 (assumed data)
Inseam
Outerseam
Pockets
Zipper
Total
Kickers
22
26
8
13
69
101 Denims
15
18
11
7
51
Total minutes
37
44
19
20
120
Total direct labor hours
22*51+15*252
26*51+18*252
8*51+11*252
13*51+7*252
69*51+51*252
Direct labor rate
4902x $12
5862x $12
3180x $17
2427x $17
16371*($12+17)
Total direct labor cost
$58,824
$70,344
$54,060
$41,259
$474,759
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