Question

1. Direct Labor Cost Budget

   Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows:

   	Junior	Pro Striker
   Production budget	6,000 units	20,100 units

   Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:

   	Forming Department	Assembly Department
   Junior	0.25 hour per unit	0.5 hour per unit
   Pro Striker	0.3 hour per unit	0.6 hour per unit

   The direct labor rate for each department is as follows:

   Forming Department	$15 per hour
   Assembly Department	$10 per hour

   Prepare the direct labor cost budget for July.

   Ace Racket Company
   Direct Labor Cost Budget
   For the Month Ending July 31
   	Forming Department	Assembly Department
   Hours required for production:
   Junior
   Pro Striker
   Total
   Hourly rate	x$	x$
   Total direct labor cost	$	$

Check My Work

• Previous
• Next

Answer 1

Ace Racket Company
Direct Labor Cost Budget
For the Month Ending July 31
	Forming Department	Assembly Department
Hours required for production:
Junior                               (a)	1,500 [6,000 units x 0.25 hours per unit]	3,000 [6,000 units x 0.5 hours per unit]
Pro Striker                        (b)	6,030 [20,100 units x 0.3 hours per unit]	12,060 [20,100 units x 0.6 hours per unit]
Total                                 (c = a + b)	7,530	15,060
Hourly rate                       (d)	$15	$10
Total direct labor cost      (c x d)	$112,950	$150,600