Johnson industries manufactures three models of a product in a single plant with
ID: 2491861 • Letter: J
Question
Johnson industries manufactures three models of a product in a single plant with two departments: Cutting and Assembly. The company has estimated costs for each of the three products models, the Zp, the Flash, and the imperial models. Prepare a direct labor budget for the upcoming year that shows the budgeted direct labor costs for each department and for company as a whole Prepare the direct labor budget for the Cutting Department, then the Assembly Department, and finally the company as a whole.Explanation / Answer
We can use the given tables to prepare budgets
Cutting department
Zips
Flashes
Imperials
Total
Units to be produced
640
770
890
Multiply by direct labor hours per unit
1.2
1.8
1.6
total cutting hours required
768
1386
1424
Multiply by direct labor cost per hour
10
10
10
Budgeted Direct Labor cost
7680
13860
14240
35780
Assembly department
Zips
Flashes
Imperials
Total
Units to be produced
640
770
890
Multiply by direct labor hours per unit
2.7
2.8
2.9
total cutting hours required
1728
2156
2581
Multiply by direct labor cost per hour
11
11
11
Budgeted Direct Labor cost
19008
23716
28391
71115
Zips
Flashes
Imperials
Total
Units to be produced
640
770
890
Multiply by direct labor hours per unit
1.2
1.8
1.6
total cutting hours required
768
1386
1424
Multiply by direct labor cost per hour
10
10
10
Budgeted Direct Labor cost
7680
13860
14240
35780
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