ACCT 556 Week 3 Homework Problem
Production Budgets
The Hale Company finished their sales projections for the coming year . The company produces one product . Part of next year ’ s sales projections are as follows :
Engineering has developed the following standards upon which the production budgets will be developed :
Item
Standard Materials usage
5 lbs per unit Material price per pound
$ 1.50 per pound
Labor usage Labor rate
0.4 hours per unit
$ 30 per hour Machine hours 3 machine hours per unit
The Hale Company uses a modified allocation method for allocating overhead costs . The rates that will be used in the coming year are as follows :
Required :
Prepare the following production budgets for July , August , and September for the Hale Company :
1 . Production budget 2 . Materials purchase budget 3 . Direct labor budget