Exercise 8-15 Direct Labor and Manufacturing Overhead Budgets [LO8-5, LO8-6] The

Question

Exercise 8-15 Direct Labor and Manufacturing Overhead Budgets [LO8-5, LO8-6] The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year 1st ouarter 2nd Quarter3rd Quarter4th Quarter Units to be produced 11,900 10,900 12,900 13,900 Each unit requires 0.20 direct labor-hours and direct laborers are paid $15.00 per hour In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $99,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $39,000 per quarter Required: 1. Calculate the company's total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced. 2&3. Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the the upcoming fiscal year and for the year as a whole

Explanation / Answer

1 Direct labor budget 1st quater 2nd quarter 3rd quarter 4th quarter Total Production in units 11900 10900 12900 13900 49600 Direct labor hours 0.2 0.2 0.2 0.2 0.2 Total direct labor hours 2380 2180 2580 2780 9920 Per hour cost 15 15 15 15 15 Total direct labor cost 35700 32700 38700 41700 148800 2 Manufacturing overhead budget 1st quater 2nd quarter 3rd quarter 4th quarter Total Production in units 11900 10900 12900 13900 49600 Direct labor hours 0.2 0.2 0.2 0.2 0.2 Total direct labor hours 2380 2180 2580 2780 9920 Variable overhead per direct labor hour 1.5 1.5 1.5 1.5 1.5 Total variable overheads cost 3570 3270 3870 4170 14880 Add Fixed overhead cost 99000 99000 99000 99000 396000 Manufacturing overheads cost 102570 102270 102870 103170 410880 3 1st quater 2nd quarter 3rd quarter 4th quarter Total Manufacturing overheads cost 102570 102270 102870 103170 410880 Less Non cash expense(depreciation) 39000 39000 39000 39000 156000 Cash disbursement 63570 63270 63870 64170 254880

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.