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 11,900 2nd Quarter 10.900 3rd Quarter 12,900 4th Quarter 13,900 Units to be produced Each unit requires 0.20 direct labor-hours and direct laborers are paid $15.00 per hour. In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $99,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $39,000 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 ove for each quarter of the upcoming fiscal year and for the year as a whole. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 and 3 Calculate the company's total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total direct labor cost Reg 2 and 3 >

Answer 1

Answers

• Requirement 1

	1 Quarter	2 Quarter	3 Quarter	4 Quarter	Year
Total DIRECT Labor Cost	$            35,700.00	$           32,700.00	$           38,700.00	$          41,700.00	$          148,800.00

--Working

Working		1 Quarter	2 Quarter	3 Quarter	4 Quarter	Year
A	Units to be produced	11,900	10,900	12,900	13,900	49,600
B	Direct labor hours (DLHs) per unit	0.2	0.2	0.2	0.2	0.2
C = A x B	Total DLHs	2,380	2,180	2,580	2,780	9,920
D	Rate per DLHs	$                   15.00	$                   15.00	$                   15.00	$                   15.00	$                    15.00
E = C x D	Total DIRECT Labor Cost	$            35,700.00	$           32,700.00	$           38,700.00	$          41,700.00	$          148,800.00

• Requirement 2 and 3

	1 Quarter	2 Quarter	3 Quarter	4 Quarter	Year
Total Manufacturing Overhead	$          102,570.00	$        102,270.00	$        102,870.00	$        103,170.00	$          410,880.00
Cash Disbursements for manufacturing Overhead	$            63,570.00	$           63,270.00	$           63,870.00	$          64,170.00	$          254,880.00

--Working

Working		1 Quarter	2 Quarter	3 Quarter	4 Quarter	Year
A [calculated above]	Total DLHs	2,380	2,180	2,580	2,780	9,920
B	Variable manufacturing overhead per DLH	$                       1.50	$                     1.50	$                     1.50	$                     1.50	$                       1.50
C = A x B	Total Variable overheads	$              3,570.00	$             3,270.00	$             3,870.00	$             4,170.00	$            14,880.00
D	Total Fixed Overheads	$            99,000.00	$           99,000.00	$           99,000.00	$          99,000.00	$          396,000.00
E = C + D	Total Manufacturing Overhead	$          102,570.00	$       102,270.00	$        102,870.00	$        103,170.00	$          410,880.00
F	Depreciation expense	$            39,000.00	$           39,000.00	$           39,000.00	$          39,000.00	$          156,000.00
G = E - F	Cash Disbursements for manufacturing Overhead	$            63,570.00	$           63,270.00	$           63,870.00	$          64,170.00	$          254,880.00