Solved: Crescent Company produces stuffed toy animals

one of these is
Crescent Company produces stuffed toy animals one of these is

Crescent Company produces stuffed toy animals; one of these is “Arabeau the Cow.” Each
Arabeau takes 0.20 yard of fabric (white with irregular black splotches) and eight ounces of

Polyfiber fill. Fabric costs $3.50 per yard and polyfiberfill is $0.05 per ounce. Crescent has
budgeted production of Arabeaus for the next four months as follows:

Units

October ........ 42,000

November ........ 90,000

December ........ 50,000

January ........ 40,000

Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 20
percent of the following month’s production needs and sufficient polyfiberfill be in inventory to
satisfy 40 percent of the following month’s production needs. Inventory of fabric and polyfiberfill
at the beginning of October equals exactly the amount needed to satisfy the inventory policy.
Each Arabeau produced requires (on average) 0.10 direct labor our. The average cost of direct
labor is $15 per hour.

Required:

1. Prepare a direct materials purchases budget of fabric for the last quarter of the year showing
purchases in units and in dollars for each month and for the quarter in total.

2. Prepare a direct materials purchases budget of polyfiberfill for the last quarter of the year
showing purchases in units and in dollars for each month and for the quarter in total.

3. Prepare a direct labor budget for the last quarter of the year showing the hours needed and
the direct labor cost for each month and for the quarter in total.

Crescent Company produces stuffed toy animals one of these is

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