The manufacturing division manager of Davison Enterprises has submitted the foll

Question

The manufacturing division manager of Davison Enterprises has submitted the following production forecast in units) for each quarter of the next fiscal year. The plant produces seats for motorcycles First Quarter 14,250 Second Quarter Third Quarter Fourth Quarter 14,150 Units to be produced 13,650 13,750 Each unit requires 0.60 direct labour-hours, and employees are paid $12 per hour 1. Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units. Davison Enterprises Direct Labor Budget First Quarter Second Quarter Third Quarter Fourth Quarter Year Units to be produced Direct labor time per unit (hours) Total direct labor hours needed Direct labor cost per hour Total direct labor cost

Explanation / Answer

1. Direct labour budget :

b) Direct labour budget :

First quarter Second quarter Third quarter Fourth quarter Year Unit produced 14250 13650 13750 14150 55800 Direct labour time per unit 0.60 0.60 0.60 0.60 0.60 Total direct labour hour needed 8550 8190 8250 8490 33480 rate per hour 12 12 12 12 12 direct labour cost 102600 98280 99000 101880 401760

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