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MCO Leather Goods manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $3 per pound and 0.7 direct labor hours at a rate of $14 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $13,000 per month. The company's policy is to end each month with direct materials inventory equal to 20% of the next month's materials requirement At the end of uaHtthe company had 3,180 pounds of direct materials in inventory. The company's production budget reports the following. Production Budget Units to be produced (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October. October 6,800 September 5,100 November 6.800 Required 1 Required 2 Required 3 Prepare direct materials budgets for September and October MCO LEATHER GOODS Direct Materials Budget For the Months of September and October October September Budgeed production (units) Materials requirements per unt (bs) Maeals needed for production (bs.p Budgeced ending inentory (s) Total materials requirements (bs) Budgead beginning imventory (bs) Materials to be purchased (bs) Direct manerial oost per b. Total budgeed direct materias Required 1 Raquired 2 Required 3 Prepare direct labor budgets for September and October (Round DL hours required per unit anrs to one decimal MCO LEATHER GOO0S Direct Labor Budget For the Months of September and October September Oetober udged producton tunits) OL nours reaued per unt ota dinect lacor hours needed Direct abor rate per hour Toal budgeted direct abor Raquired Raquired 3 Required 2 Prepare factory overhead budgets for September and October MCO LEATHER 0000 Factory Overhead Bulget Far the Months of September and October Septemer Oueber total diet abor hous eeded VOH rae per DL hour Budgeted varabe veead Budpeted ed overhead Total budgeted facory ovaead

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