The Production Department of Hruska Corporation has submitted the following fore

Question

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year 1st Quarter 10,400 2nd Quarter 3rd Quarter 11,400 4th Quarter 12,400 Units to be produced 9,400 Each unit requires 0.25 direct labor-hours and direct laborers are paid $12.00 per hour. In addition, the variable manufacturing overhead rate is $1.70 per direct labor-hour. The fixed manufacturing overhead is $84,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $24,000 per quarter. Required: 1. Calculate the company's total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced. 2&3. Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the the upcoming fiscal year and for the year as a whole.

Explanation / Answer

1 1st quater 2nd quater 3rd quater 4th quater Year Total direct labour cost $    31,200 $     28,200 $    34,200 $    37,200 $1,30,800 2 1st quater 2nd quater 3rd quater 4th quater Year Total manufacturing overhead $    88,420 $     87,995 $    88,845 $    89,270 $3,54,530 Cash disbursements for manufacturing overhead $    64,420 $     63,995 $    64,845 $    65,270 $2,58,530 Workings :- 1 1st quater 2nd quater 3rd quater 4th quater Year Required production in units 10400 9400 11400 12400 43600 Direct labour per unit (hours) 0.25 0.25 0.25 0.25 0.25 Total direct labour hours needed 2600 2350 2850 3100 10900 Direct labour cost per hour $ 12 $ 12 $ 12 $ 12 $ 12 Total direct labour cost $    31,200 $     28,200 $    34,200 $    37,200 $1,30,800 2 1st quater 2nd quater 3rd quater 4th quater Year Budgeted direct labour hours 2600 2350 2850 3100 10900 Variable manufacturing overhead rate $        1.70 $          1.70 $         1.70 $         1.70 $         1.70 (a) Variable manufacturing overhead $      4,420 $        3,995 $       4,845 $       5,270 $    18,530 (b) Fixed manufacturing overhead $    84,000 $     84,000 $    84,000 $    84,000 $3,36,000 Total manufacturing overhead (a) + (b) $    88,420 $     87,995 $    88,845 $    89,270 $3,54,530 Less: Depreciation $    24,000 $     24,000 $    24,000 $    24,000 $    96,000 Cash disbursements for manufacturing overhead $    64,420 $     63,995 $    64,845 $    65,270 $2,58,530

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