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: Each unit requires 0.25 direct labor-hours and direct laborers are paid $14.00 per hour. In addition, the variable manufacturing overhead rate is $1.60 per direct labor-hour. The fixed manufacturing overhead is $95,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $35,000 per quarter Required: 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. (Round "Direct labor time per unit (hours)" and "Direct labor cost per hour" answers to 2 decimal places.) Prepare the company's manufacturing overhead budget.

Explanation / Answer

1. Hruska corporation

Direct labour hours budget

2. Hruska corporation

Manufacturing overhead budget

1st quarter 2nd quarter 3rd quarter 4 quarter Year Required production in units 11500 10500 12500 13500 48000 Direct labour time per unit(hrs) 0.25 0.25 0.25 0.25 0.25 Total direct labour hours needed 2875 2625 3125 3375 12000 Direct labour cost per hour 14 14 14 14 14 Total direct labour cost 40250 36750 43750 47250 168000

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