Question

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 8,800 units 23,200 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 0.20 hour per unit 0.50 hour per unit 0.70 hour per unit Pro Striker 0.30 hour per unit The direct labor rate for each department is as follows: $20.00 per hour Forming Department Assembly Department $11.00 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 Hours required for production: Assembly Department Junior Pro Striker Total Hourly rate Total direct labor cost

Answer 1

				Forming	Workings	Assembly	Workings
Hours Required for production
Junior				1760	(0.2 x 8800)	4400	(0.5 x 8800)
Pro Striker				6960	(0.3 x 23200)	16240	(0.7 x 23200)
Total				8720		20640
Hourly Rate				$           20.00		$           11.00
Total Direct Labor Cost				$ 174,400.00		$ 227,040.00

Is this correct?