Question

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: Units to be produced 1st Quarter 10,600 2nd Quarter 8,000 3rd Quarter 8,300 4th Quarter 10,600 Each unit requires 0.25 direct labor-hours, and direct laborers are paid $16.00 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 2,400 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,400 hours anyway. Any hours worked in excess of 2,400 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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. (Round "Direct labor time per unit (hours)" answers to 2 decimal places.) Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost (Required 1 Required 2 >

Answer 1

Required 1 : Direct labour budget assuming flexible workforce (refer screenshot attached below)

Required 1 Rordan Corporation Direct Labour Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total 10,600.00 8,000.00 8,300.00 10,600.00 37,500.00 Budgeted Production (as given in question) [A] Direct Labour time per unit (hours) [B] Total direct-labour hours needed [C] =[A]*[B] Direct labour cost per hour [D] 0.25 2,650.00 16.00 0.25 2,000.00 16.00 0.25 2,075.00 16.00 0.25 2,650.00 16.00 0.25 9,375.00 16.00 Total Direct labour cost [E] = [C]*[D] 42,400.00 32,000.00 33,200.00 42,400.00 1,50,000.00
Required 2: Direct Labout budget with fixed workforce (overtime for extra work hours)

Required 2 Rordan Corporation Direct Labour Dudaot 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total 10,600.00 8,000.00 8,300.00 10,600.00 37,500.00 Budgeted Production (A) Direct Labour time per unit (hours) [B] Total direct-labour hours needed [C] = [A]*[B] 0.25 2,650.00 0.25 2,000.00 0.25 2,075.00 0.25 2,650.00 2,400.00 2,400.00 Regular hours [D] Overtime hours (El = IC-IDI 2,400.00 250.00 2,400.00 250.00 Regular hours wage rate [F] Wages for regular hours [G] = [F]*[D] 16.00 38,400.00 16.00 38,400.00 16.00 38,400.00 16.00 38,400.00 1,53,600.00 24.00 Overtime wage rate ($16 per hour *1.5) [H] Overtime wages [i] = [H]*[E] 24.00 6,000.00 24.00 - 24.00 6,000.00 12,000.00 Total Direct labour cost [j] =[0]+[G] 44,400.00 38,400.00 38,400.00 44,400.00 1,65,600.00
Required 3 : Direct Materials Budget (mink cares)

Required 3 Mink Caress Direct Materials Budget - Year 2 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total 74,000.00 1,04,000.00 1,64,000.00 1,14,000.00 4,56,000.00 Budgeted Production [A] Unit of raw material needed per unit of finished goods (grams) [B] Unit of raw material needed to meet production [C] =[A]"[B] Opening inventory available [D] 2.00 1,48,000.00 29,600.00 2.00 2,08,000.00 41,600.00 2.00 3,28,000.00 65,600.00 2.00 2,28,000.00 45,600.00 2.00 9,12,000.00 1,82,400.00 Total units of raw materials needed [E] = [C]-[D] Closing inventory (20% of next quarter production) [F] 1,18,400.00 41,600.00 1,66,400.00 65,600.00 2,62,400.00 45,600.00 1,82,400.00 33,600.00 7,29,600.00 1,86,400.00 Units of raw material to be purchased (grams) [G] = [E] + [F] Unit cost of raw material ($ per gram) [H] 1,60,000.00 1.50 2,32,000.00 1.50 3,08,000.00 1.50 2,16,000.00 1.50 9,16,000.00 1.50 Cost of raw material to be purchased [0] = [G]*[H] 2,40,000.00 3,48,000.00 4,62,000.00 3,24,000.00 13,74,000.00