The producton department of hrusa corporation has submitted the following foreca
ID: 2434700 • Letter: T
Question
The producton department of hrusa corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:Units to be produced....1st quarter 2nd quarter 3rd quarter 4th quarter
12,000 10,000 13,000 14,000
Each unit requires 0.2 direct labor-hours and direct laborers are paid $12.00 per hour.
In addition the variable manufacturing overhead rate is $1.75 per direct labor-hour. The fixed manufacturing overhead is $86,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $23,000 per quarter.
1. Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.
2. Prepare the company;s manufacturing overhead budget.
Explanation / Answer
Budegted units Quarter 1 12000 Quarter 2 10000 Quarter 3 13000 Quarter 4 14000 Total units to be produced in fiscal year 49000 Direct labor hours required ofr each unit =0.2 hrs Total direct labor hours required= 49,000*0.2 = 9800hrs Total labor cost = 9800*1.75 = $17,150 Company's direct labor budget is $17,150 Fixed manufacturing budget =$86,000 per quarter Cash fixed budget per quarter = 86000-23000 = 63000 Total company's cash manufacturing budget = 63000*4 =$252,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.