21. Hagos Corporation is working on its direct labor budget for the next two mon

Question

21. Hagos Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.84 direct labor-hours. The direct labor rate is $9.40 per direct labor-hour. The production budget calls for producing 2,100 units in June and 1,900 units in July. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months? A. $15,792.00 B. $15,002.40 C. $16,581.60 D. S31,584.00 22. Prestwich Company has budgeted production for next year as follows: Quarter First Second Third Fourth Production in units 80,000 90,000 70,00 Two pounds of material A are required for each unit produced. The company has a policy of maintaining a stock ofmaterial A on hand at the end of each quarter equal to 25% ofthe net quarter's production needs for material A. A total of 30,000 pounds of material A are on hand to start the year. Budgeted purchases of material A for the second quarter would be: A. 82,500 pounds B. 165,000 pounds C. 200,000 pounds D. 205,000 pounds 23. Shuck Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,100 direct labor-hours will be required in May. The variable overhead rate is $1.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,440 per month, which includes depreciation of $8,910. All other fixed manufacturing overhead costs represent current cash flows. The May cash disbursements(payments) for manufacturing overhead on the manufacturing overhead budget is: A. $102,870 B. $11,340 C. $91,530 D. $111,780 E. $100,440

Explanation / Answer

21) Total labour cost for two month = (2100+1900)*0.84*9.40 = 31584

so answer is d) $31584.00

22) Budgeted purchase for second quarter = 80000*2+(90000*2*25%)-(80000*2*25%) = 165000 pounds

so answer is b) 165000 pounds

23) Cash disbursement on the manufacturing overhead = (8100*1.40)+100440-8910 = 102870

so answer is a) 102870

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