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 11,500 2nd Quarter 10,500 3rd Quarter 12,500 4th Quarter 13,500 Units to be produced 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 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 quarter 2nd quarter 3rd quarter 4th quarter Year Units to be produced 11500 10500 12500 13500 Direct labor hours per unit 0.25 0.25 0.25 0.25 Budgeted direct labor hours 2875 2625 3125 3375 Direct labor cost per unit 14 14 14 14 Total direct labor cost 40250 36750 43750 47250 168000 2&3 1st quarter 2nd quarter 3rd quarter 4th quarter Year Budgeted direct labor hours 2875 2625 3125 3375 Variable manufacturing overhead rate 1.6 1.6 1.6 1.6 Total Variable manufacturing overhead 4600 4200 5000 5400 Fixed manufacturing overhead 95000 95000 95000 95000 Total manufacturing overhead 99600 99200 100000 100400 399200 Less: Depreciation 35000 35000 35000 35000 Cash disbursements for manufacturing overhead 64600 64200 65000 65400 259200

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