Reference no: EM131817731

Question - Production Budget 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 21,610 and 38,720 pairs, respectively, for March 2012. The finished goods inventory is assumed as follows:

	Kickers	101 Denims
March 1 estimated inventory	970	1,090
March 31 desired inventory	360	1,370

Assume the following direct labor data per 10 pairs of Kickers and 101 Denims for four different sewing operations:

	Direct Labor per 10 Pairs
	Kickers	101 Denims
Inseam	21 minutes	14 minutes
Outerseam	25	17
Pockets	8	10
Zipper	12	7
Total	66 minutes	48 minutes

a. Prepare a production budget for March.

b. Prepare the March direct labor cost budget for the four sewing operations, assuming a $13.00 wage per hour for the inseam and outerseam sewing operations and a $18.00 wage per hour for the pocket and zipper sewing operations.