Asking again, as I am having some trouble on a test. When I get my tests back, I

Question

Asking again, as I am having some trouble on a test. When I get my tests back, I will award points.

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 Budget January February March Production Unit 50000 45000 55000 No of Hour Required per unit 3 3 3 Total No of Direct Labor Hour Required 150000 135000 165000 Wage Rate $                10.00 $                10.00 $                10.00 Total Direct Labor $ 1,500,000.00 $ 1,350,000.00 $ 1,650,000.00 Manufacturing Overhead Budget January February March Production Unit 50000 45000 55000 Unit Related Overhead $      300,000.00 $      270,000.00 $      330,000.00 Batch Related Overhead $      150,000.00 $      135,000.00 $      165,000.00 Facility Overhead $        59,000.00 $        59,000.00 $        59,000.00 Total Manufacturing Overhead $      509,000.00 $      464,000.00 $      554,000.00

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