(Production; purchases; direct labor & OH budgets) Atkinson’s Reliable Tools makes two products that use similar raw materials: #587Q and #253X. Estimated production needs for a unit of each product follow.
|
#587Q |
#253X |
|
|
Steel (in pounds) |
3 |
5 |
|
Wood (in board feet) |
0.5 |
0.2 |
|
Direct labor (in hours) |
2 |
3 |
|
Machine hours |
0.5 |
0.7 |
Estimated sales in units by product for 2011 are 80,000 of #587Q and 30,000 of #253X. Additionally, estimated beginning and desired ending inventory quantities for 2011 are as follows.
|
Beginning |
Ending |
|
|
#587Q (units) |
800 |
640 |
|
#253X (units) |
1,200 |
900 |
|
Steel (in pounds) |
2,000 |
1,400 |
|
Wood (in board feet) |
800 |
600 |
Overhead is applied to production at the rate of $15 per machine hour and the direct labor wage rate is $10.50 per hour. Prepare the production, purchases, direct labor, and overhead budgets for 2011.