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	11,100	10,100	12,100	13,100

Each unit requires 0.20 direct labor-hours and direct laborers are paid $12.50 per hour.

In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $91,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $31,000 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)" and "Direct labor cost per hour" answers to 2 decimal places.)

2. Prepare the company’s manufacturing overhead budget.

Answer 1

Direct Labor Budget
	1st Quarter	2nd	3rd	4th
Units to be produced	11100	10100	12100	13100
Labor hours per unit	0.2	0.2	0.2	0.2
Labor hours required for production	2220	2020	2420	2620
Rate per hour	12.5	12.5	12.5	12.5
Budgeted Cost	27750	25250	30250	32750
Manufacturing Overhead Budget
	1st Quarter	2nd	3rd	4th
Labor hours required for production	2220	2020	2420	2620
Variable manufacturing rate per hour	1.5	1.5	1.5	1.5
Budgted variable manufacturing overhead	3330	3030	3630	3930
Fized manufacturing overhead	91000	91000	91000	91000
Bugdeted Manufacturing Overhead	94330	94030	94630	94930