Question

The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year 2nd 1st Quarter Quarter 10,800 8,500 3rd Quarter 7 100 4th Quarter 11,200 Units to be produced Each unit requires 0.25 direct labor-hours, and direct laborers are paid $20.00 per hour Required: 1. Complete 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)" answers to 2 decimal places.) Rordan Corporation Direct Labor Budget 2nd Quarter 3rd Quarter 4th Quarter Year Quarter Required production in units

Answer 1

Solution

Rordan Corporation
Direct labor budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units to be produced	10800	8500	7100	11200	37600
Direct labor time per unit (hours)	0.25	0.25	0.25	0.25	0.25
Total direct labor-hours needed	2700	2125	1775	2800	9400
Direct labor cost per hour	$                    20	$                    20	$                    20	$                    20	$                    20
Total direct labor cost	$            54,000	$            42,500	$           35,500	$            56,000	$          188,000

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Rordan Corporation
Direct labor budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units to be produced	10800	8500	7100	11200	37600
Direct labor time per unit (hours)	0.25	0.25	0.25	0.25	0.25
Total direct labor-hours needed	2700	2125	1775	2800	9400
Regular hours	2500	2500	2500	2500	10000
Overtime hours	200			300	500
Wages for regular hours	$      50,000.00	$      50,000.00	$     50,000.00	$      50,000.00	$    200,000.00
Overtime wages	$        6,000.00			$        9,000.00	$ 15,000.00
Total direct labor cost	$      56,000.00	$      50,000.00	$     50,000.00	$      59,000.00	$    215,000.00

Overtime rate = 20 x 1.5=30 per hour