The production manager of Rordan Corporation has submitted the following forecas
ID: 2453935 • Letter: T
Question
The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
Complete the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Round "Direct labor time per unit (hours)" answers to 2 decimal places.)
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 7,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 7,000 hours anyway. Any hours worked in excess of 7,000 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.)
The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th QuarterYear Required production in units Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost 2. 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 7,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 7,000 hours anyway. Any hours worked in excess of 7,000 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.) Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total direct labor-hours needed Regular hours paid Overtime hours paid Wages for regular hours Overtime wages Total direct labor costExplanation / Answer
Answer:
1) Direct Labour Budget for the upcoming fiscal year (Assumed direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced)
Rodan Corporation
Direct Labour Budget
Particulars
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
A.
Required Production in Units
12,000
9,000
7,200
11,300
39,500
B.
Direct Labour Time per Unit (Hours)
0.65
0.65
0.65
0.65
C.
Total Direct Labour Hours Needed (A x B)
7800
5850
4680
7345
25,675
D.
Direct Labour Cost per Hour
$20
$20
$20
$20
E.
Total Direct Labour Cost (C x D)
$156,000
$117,000
$93,600
$146,900
$513,500
2) Direct Labour Budget for the upcoming fiscal year (under guaranteed and overtime wages)
Rodan Corporation
Direct Labour Budget
Particulars
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
A.
Total Direct Labour Hours Needed (A x B)
7800
5850
4680
7345
25,675
B.
Regular Hours Paid
7000
7000
7000
7000
28,000
C.
Overtime Hours Paid (A-B)
800
-
-
345
1,145
D.
Wages for Regular Hour (B x $20)
$140,000
$140,000
$140,000
$140,000
$560,000
E.
Overtime Wages (C x $20 x 1.5 times)
$24,000
-
-
$10,350
$34,350
F.
Total Direct Labour Cost (D + E)
$164,000
$140,000
$140,000
$150,350
$594,350
Rodan Corporation
Direct Labour Budget
Particulars
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Year
A.
Required Production in Units
12,000
9,000
7,200
11,300
39,500
B.
Direct Labour Time per Unit (Hours)
0.65
0.65
0.65
0.65
C.
Total Direct Labour Hours Needed (A x B)
7800
5850
4680
7345
25,675
D.
Direct Labour Cost per Hour
$20
$20
$20
$20
E.
Total Direct Labour Cost (C x D)
$156,000
$117,000
$93,600
$146,900
$513,500
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