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 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 12,000 10.000 13,000 14,000 Each unit requires 0.2 direct labor-hours and direct laborers are paid $12.00 per hour In addition, the variable manufacturing overhead rate is $1.75 per direct labor-hour The fixed manufacturing overhead is $86.000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $23,000 per quarter Required 1. Prepare 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.) Hruska Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year 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. Prepare the company's manufacturing overhead budget Hruska Corporation Manufacturing Overhead Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing overhead Less depreciation Cash disbursements for manufacturing 0 overhead

Explanation / Answer

              direct labor Budget                     1st Qtr 2nd qtr 3rd qtr 4th qtr Year Required production in units 12,000 10,000 13,000 14,000 49,000 direct labor time per unit 0.2 0.2 0.2 0.2 0.2 total direct labor hours needed 2400 2000 2600 2800 9800 direct labor cost per horu 12 12 12 12 12 total direct labor cost 28800 24000 31200 33600 117600 Manufacturing overhead budget 1st Qtr 2nd qtr 3rd qtr 4th qtr Year Variable manufacturing overhead 4200 3500 4550 4900 17150 fixed manufacturing overhead 86,000 86,000 86,000 86,000 344,000 total manufacturing overhead 90200 89500 90550 90900 361150 less Depreciation 23,000 23,000 23,000 23,000 23,000 cash disbursements for MOH 67,200 66,500 67,550 67,900 338,150 Variable MOH = 1.75 * DLH's as calculated in direct labor budget

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