Exercise 9-10 Lowell Company makes and sells artistic frames for pictures. The c

Question

Exercise 9-10 Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2017 Marc January 10,200 $50.20 2.0 $7.00 February April May 8,600 8,900 Estimated unit sales Sales price per unit Direct labor hours per unit Wage per direct labor hour 8,400 $47.10 $47.10 $47.10 $47.10 1.6 $7.00$7.00 $8.00 $8.00 11,800 Downloadable eTextbook 2.0 1.6 1.6 Lowell has a labor contract that calls for a wage increase to $8.00 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1 Lowell expects to begin the year with 18,460 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales, plus 70% of the second following month's sales

Explanation / Answer

Lowell Company Direct Labor Budget For the Quarter Ending March 31 , 2017 January February March Total Production in Units (a) 10,200 11,800 8,600 Direct Labor Hours Per Unit (b) 2.0 2.0 1.6 Total Hours Needed (c) = (a)*(b) 20,400 23,600 13,760 Rate Per Hour (d) 7.00 7.00 7.00 Total Direct Labor (e) = (c) *(d) 142,800 165,200 96,320 404,320

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