Question

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 9,000 2nd Quarter 7,000 3rd Quarter 7,500 4th Quarter 8,400 Units to be produced Each unit requires 0.45 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 3,500 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 3,500 hours anyway. Any hours worked in excess of 3,500 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

a) Direct labor budget

	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Production Units	9000	7000	7500	8400	31900
Labor hour per unit	0.45	0.45	0.45	0.45	0.45
Production labor hour	4050	3150	3375	3780	14355
Rate per hour	10	10	10	10	10
Direct labor cost	40500	31500	33750	37800	143550

b) Direct labor budget

	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Production Units	9000	7000	7500	8400	31900
Labor hour per unit	0.45	0.45	0.45	0.45	0.45
Production labor hour	4050	3150	3375	3780	14355
Regular hour	3500	3500	3500	3500	14000
Overtime hour	550			280	830
Wages for regular hour	35000	35000	35000	35000	140000
wages for overtime	8250			4200	12450
Total direct labor cost	43250	35000	35000	39200	152450