Solution-Problem - Production and Direct Labor Cost Budgets

Problem - Production and Direct Labor Cost Budgets

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Reference no: EM132686064

Problem - Production and Direct Labor Cost Budgets

Levi Strauss & Co. 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 20,500 and 44,200 pairs, respectively, for March 2012. The finished goods inventory is assumed as follows:

	Dockers	501 Jeans
March 1 estimated inventory	980	1,590
March 31 desired inventory	480	2,390

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	18 minutes	12 minutes
Outerseam	21	15
Pockets	6	9
Zipper	12	6
Total	57 minutes	42 minutes

Required -

a. Prepare a production budget for March. Prepare the budget in two columns: Dockers and 501 Jeans.

b. Prepare the March direct labor cost budget for the four sewing operations, assuming a $13 wage per hour for the inseam and outerseam sewing operations and a $15 wage per hour for the pocket and zipper sewing operations. Prepare the direct labor cost budget in four columns: inseam, outerseam, pockets, and zipper.

Reference no: EM132686064

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Problem - Production and Direct Labor Cost Budgets

Reference no: EM132686064

Reference no: EM132686064

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