Stenback Industries manufactures three models of a product in a single plant wit

Question

Stenback 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 product models, the Royal, the Flash, and the Regal models. (Click the icon to view the direct labor hour information.) (Click the icon to view the unit production information.) Requirement Prepare a direct labor budget for the upcoming year that shows the budgeted direct labor costs for each department and for the company as a whole

Explanation / Answer

Royal Flash Regal Total Cutting department Units to be produced 580 780 870 Direct labor hrs per unit 1 1.9 1.3 Total cutting hours required 580 1482 1131 Direct labor cost per hour 7 7 7 Budgeted direct labor cost 4060 10374 7917 22351 Assembly department Units to be produced 580 780 870 Direct labor hrs per unit 2.2 2.6 2.7 Total assembly hours required 1276 2028 2349 Direct labor cost per hour 8 8 8 Budgeted direct labor cost 10208 16224 18792 45224 Total Budgeted direct labor cost 14268 26598 26709 67575

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