Problem #1
Gildan, Inc. is the main manufacturing of IPads in Australia. Their budgeted sales for the first quarter of the year 2017 are the following:
|
Months
|
IPads
|
Budgeted Production Units
|
|
January
|
70,000
|
69,000
|
|
February
|
55,000
|
58,000
|
|
March
|
60,000
|
57,000
|
The company's policy requires maintaining units on hand at the end of each month equal to 20% of next month's budgeted unit sales, and to maintain materials at the end of each month equal to 10% of the next month's production needs. Each IPads requires 4 pounds of material and 15 minutes of direct labor to produce. Employees are paid $15 per hour. Manufacturing overhead is applied at $5.40 per direct labor hour.
Required: Prepare a direct labor budget for the month of February 28, 2017.
Problem #2
During October, Minolta, Inc.'s production budget showed 4,500 units to be produced, and its sales budget showed 4,800 cameras to be sold. Budgeted manufacturing costs for October appear below:
|
Indirect labor
|
$5.00 per camera
|
|
Supplies
|
$6.80 per camera
|
|
Factory depreciation
|
$36,000
|
|
Factory supervisory salaries
|
30,000
|
|
Fixed factory occupancy
|
44,000
|
Required: Prepare a manufacturing overhead budget for October 31, 2017.