The production manager of Rordan Corporation has submitted the following forecas

Question

The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,400 6,500 7,200 8,100 Each unit requires 0.65 direct labor-hours, and direct laborers are paid $12.00 per hour.

1. Complete the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 5,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 5,000 hours anyway. Any hours worked in excess of 5,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. (Input all amounts as positive values.)

Explanation / Answer

DIRECT LABOUR BUDGET FOR QUARTER 1

DIRECT LABOUR BUDGET FOR QUARTER 2

DIRECT LABOUR BUDGET FOR QUARTER 3

DIRECT LABOUR BUDGET FOR QUARTER 4

UNITS TO BE PRODUCED 8400 DIRECT LABOUR HOUR TO BE WORKED (8400 * 0.65) 5460 DIRECT LABOUR PAYMENT FOR FIRST 5000 HOUR (5000 * $12) $60000 DIRECT LABOUR PAYMENT FOR NEXT 460 HOUR [460 * ($12 * 1.5)] $8280 TOTAL BUDGETED COST FOR 1ST QUARTER $68280

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