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 $13.00 per hour.

In addition, the variable manufacturing overhead rate is $1.90 per direct labor-hour. The fixed manufacturing overhead is $88,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $28,000 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

ans 1 Direct labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Units to be produced 10,800 9,800 11,800 12,800 45,200 Direct labor hour required per unit 0.25 0.25 0.25 0.25 0.25 Estimeated Total direct labor hours required T 2700 2450 2950 3200 11300 Labor rate perhour   L 13 13 13 13 13 Estimated Direct labor cost T*L 35100 31850 38350 41600 146900 ans 2 total estimated manufacturing overhead cost 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Units to be produced 10,800 9,800 11,800 12,800 45,200 Estimeated Total direct labor hours required T 2700 2450 2950 3200 11300 Varaibel Manufacturing overhead rate per hour 1.9 1.9 1.9 1.9 1.9 Estimated Varaible Manufacturing overhead V 5130 4655 5605 6080 21470 Estimated Fixed manufacturing overhead 88000 88000 88000 88000 352000 total estimated manufacturing overhead cost 93130 92655 93605 94080 373470 Less: Depreciation 28000 28000 28000 28000 112000 Cash disbursement for Manufacturing overhead 65130 64655 65605 66080 261470

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