Problem
Cannon Company manufactures garden sculptures. Each seulpture requires 8 pounds of direct materials at a cost of $3 per pound and 0.5 direct labor hours at a rate of S18 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed manufacturing overhead is $4,000 per month. The company's policy is to maintain direct materials inventory equal to 20% of the next month's materials requirement. At the end of February, the company had 5,280 pounds of direct materials in inventory. The company's production budget reports the following.
Production Budget
Units to be produced
March 3,300
April 4,600
May 4,800
Task
a) Prepare direct materials budgets for March and April.
b) Prepare direct labor budgets for March and April.
c) Prepare factory overhead budgets for March and April.