Question

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 9,400 2nd Quarter 7,000 3rd Quarter 7,700 4th Quarter 10,000 Units to be produced Each unit requires 0.25 direct labor-hours, and direct laborers are paid $10.00 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 2,200 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,200 hours anyway. Any hours worked in excess of 2,200 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

Solution

Rordan Corporation
Direct labor budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units to be produced	9400	7000	7700	10000	34100
Direct labor time per unit (hours)	0.25	0.25	0.25	0.25	0.25
Total direct labor-hours needed	2350	1750	1925	2500	8525
Direct labor cost per hour	$                    10	$                    10	$                    10	$                    10	$                    10
Total direct labor cost	$            23,500	$            17,500	$           19,250	$            25,000	$            85,250

. Overtime rate = 10 x 1.5= $15 per hour

Rordan Corporation
Direct labor budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units to be produced	9400	7000	7700	10000	34100
Direct labor time per unit (hours)	0.25	0.25	0.25	0.25	0.25
Total direct labor-hours needed	2350	1750	1925	2500	8525
Regular hours	2200	2200	2200	2200	8800
Overtime hours	150			300	450
Wages for regular hours	$      22,000.00	$      22,000.00	$     22,000.00	$      22,000.00	$      88,000.00
Overtime wages	$        2,250.00			$        4,500.00	$        6,750.00
Total direct labor cost	$      24,250.00	$      22,000.00	$     22,000.00	$      26,500.00	$      94,750.00