Reference no: EM133161818

Question - Production and Direct Labor Cost Budgets - Two-Leg Company manufactures slacks and jeans under a variety of brand names, such as Dockers and 501 Jeans. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 Jeans shows estimated sales of 18,520 and 32,760 pairs, respectively, for May. The finished goods inventory is assumed as follows:

	Dockers	501 Jeans
May 1 estimated inventory	830	920
May 31 desired inventory	310	1,160

Assume the following direct labor data per 10 pairs of Dockers and 501 Jeans for four different sewing operations:

	Direct Labor per 10 Pairs
	Dockers	501 Jeans
Inseam	17 minutes	11 minutes
Outerseam	21	14
Pockets	6	8
Zipper	10	6
Total	54 minutes	39 minutes

Required -

a. Prepare a production budget for May. Prepare the budget in two columns: Dockers and 501 Jeans. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $11 wage per hour for the inseam and outerseam sewing operations and a $16 wage per hour for the pocket and zipper sewing operations. Prepare the direct labor cost budget in four columns: inseam, outerseam, pockets, and zipper.