Question

The manufacturing division manager of Davison Enterprises has submitted the following production forecast (in units) for each quarter of the next fiscal year. The plant produces seats for motorcycles: Units to be produced First Quarter 10,750 Second Quarter 10, 150 Third Quarter 10,250 Fourth Quarter 10,650 Each unit requires 0.40 direct labour-hours, and employees are paid $8 per hour. Required: 1. Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecast number of units. Davison Enterprises Direct Labour Budget First Quarter Second Quarter Third Quarter Fourth Quarter Year Units to be produced Direct labour time per unit (hours) Total direct labour hours needed Direct labour cost per hour Total direct labour cost 2. Prepare the company's direct labour budget for the next fiscal year, assuming that the direct labour workforce is not adjusted each quarter. Instead, assume that the company's direct labour workforce consists of permanent employees who are quaranteed to be paid Corner

Answer 1

Divison Enterprises Direct Labour budget pahalan Second Quarter Third Quarter fourth Quarter Year units to be produced 10450 10150 10250 106.30 H1800 0.40 Direct Labour time per unit choun Total direct labour houn needed 4300 C10+50 YOL 4060 CLOISOX0.40) H100 (10250X0.40) 1260 (10 650x0.40) Direct Labour cost per $8 hour Total direct labour COS $133760 $34400 (4300 x $8) $32480 (41060x$8) $32800 CH100 x $8) $34080 (4260 x $8)

Davison Enterprises Direct Labour budget Parculus Fincker Quarter Second Quarter Third Quarter fourth Quarter Year 1300 4060 44100 4260 16720 Toiled direct labowy Lees needed Regular Foers paid Over time hocus poid 44100 4100 2100 41100 16400 200 160 360 wages for Regular $ 32800 $32800 CHOOX$8) $32800 (2100x$9) $32800 (Hoox $8) $131200 Chroox$8) overfione wages $ 2400 (200 hos x $12) $1920 (160 hos x $12) $4320 Total direct labour cost $ 35200 $32800 $32800 $34720 $135520

Overtime wage Rate Rate 1.50x Normal wage Rate 1.50 * $ 8 =