The production manager of Rordan Corporation has submitted the following quarter
ID: 2583103 • Letter: T
Question
The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year:
Each unit requires 0.65 direct labor-hours, and direct laborers are paid $10.00 per hour.
Required:
1. Prepare the company’s direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.
2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 6,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 6,000 hours anyway. Any hours worked in excess of 6,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 9,600 7,500 7,800 10,100Explanation / Answer
1 Statment Showing direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter.
2. Statment Showing direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter.
Particulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced (A) 9600 7500 7800 10100 Direct Labour Hour Per Unit (B) 0.65 0.65 0.65 0.65 Total Direct Labour Hour (C= A*B) 6240 4875 5070 6565 Normal Hourly Rate (D) $ 1 $ 1 $ 1 $ 1 Direct Labor Cost Per Queter (E= C*D) $ 6,240 $ 4,875 $ 5,070 $ 6,565Related Questions
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