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

Question

4 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: 10 points 1st Quarter 10,200 2nd Quarter 3rd Quarter4th Quarter Units to be produced 9,200 11,200 12,200 eBookEach unit requires 0.25 direct labor-hours and direct laborers are paid $11.00 per hour. Print In addition, the variable manufacturing overhead rate is $1.60 per direct labor-hour. The fixed manufacturing overhead is References$82,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $22,000 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 cost budget

2&3.

Manufacturing overhead cost budget

Cash disbursements for manfacturing overhead

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year Units to be produced 10200 9200 11200 12200 42800 Hours per unit 0.25 0.25 0.25 0.25 0.25 Direct labor hours required for production 2550 2300 2800 3050 10700 Cost per hour $11.00 $11.00 $11.00 $11.00 $11.00 Direct labor cost $28050 $25300 $30800 $33550 $117700

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