10. Kolinchak Enterprises has the following production planned for the first qua

Question

10. Kolinchak Enterprises has the following production planned for the first quarter of next year:

January          50,000
February        45,000
March             55,000

Each unit requires 3 hours of direct labor time at $10 per hour. Unit-related overhead is $12 per machine hour and each unit requires 1/2 machine hour. Batch-related overhead is $3,000 per batch with a batch-size of 1,000 units. Facility overhead, including depreciation of $17,000, is $59,000 per month. Prepare the direct labor and manufacturing overhead budget for January.

Explanation / Answer

Direct Labor   50,000 *3*10= 1,500,000

Overhead 50,000* 1/2 *12 + 50,000/1,000 * 3,000 + 59,000

300,000 + 150,000 +59,000= 559,000

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