Question

Exercise 8-15 Direct Labor and Manufacturing Overhead Budgets [LO8-5, LO8-6] The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 10,600 2nd Quarter 9,600 3rd Quarter 11,600 4th Quarter 12,600 Units to be produced Each unit requires 0.30 direct labor-hours and direct laborers are paid $12.50 per hour. In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $86,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $26,000 per quarter. Required: 1. Calculate the company's total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. 2&3. Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole. * Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 and 3 Calculate the company's total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole. 2nd Total manufacturing overhead Cash disbursements for manufacturing overhead 1st 3rd 4th Quarter Quarter Quarter Quarter $ 101,900 $ 100,400 $ 103,400 $ 104,900 $ 75,900 Ⓡ$ 74,400 $ 77,400 Ⓡ$ 78,900 Year $ 410,600 $ 306,600 % < Req1 Req 2 and 3 >

Answer 1

Hruska Corporation
Direct Labor Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Required production in units	10600	9600	11600	12600	44400
Direct labor time per unit (hours)	0.30	0.30	0.30	0.30	0.30
Total direct labor­ hours needed	3180	2880	3480	3780	13320
Direct labor cost per hour	12.50	12.50	12.50	12.50	12.50
Total direct labor cost	39750	36000	43500	47250	166500
2&3
Hruska Corporation
Manufacturing Overhead Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Total direct labor ­hours needed	3180	2880	3480	3780	13320
X Variable manufacturing overhead rate	1.50	1.50	1.50	1.50	1.50
Variable manufacturing overhead	4770	4320	5220	5670	19980
Fixed manufacturing overhead	86000	86000	86000	86000	344000
Total manufacturing overhead	90770	90320	91220	91670	363980
Less depreciation	26000	26000	26000	26000	104000
Cash disbursements for manufacturing overhead	64770	64320	65220	65670	259980