Question

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: Units to be produced 1st Quarter 8, 200 2nd Quarter 6,500 3rd Quarter 7,100 4th Quarter 8,000 Each unit requires 0.25 direct labor-hours, and direct laborers are paid $12.00 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 1,800 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 1,800 hours anyway. Any hours worked in excess of 1,800 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 irect 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

Answer 1

Solution 1:

Rordan Corporation
Direct Labor Budget
Particulars	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Required production in units	8200	6500	7100	8000	29800
Direct labor time per unit (In hours)	0.25	0.25	0.25	0.25	0.25
Total direct labor hours	2050	1625	1775	2000	7450
Direct labor rate per hour	$12.00	$12.00	$12.00	$12.00	$12.00
Budgeted Direct labor cost	$24,600.00	$19,500.00	$21,300.00	$24,000.00	$89,400.00

Solution 2:

Rordan Corporation
Direct Labor Budget
Particulars	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Required production in units	8200	6500	7100	8000	29800
Direct labor time per unit (In hours)	0.25	0.25	0.25	0.25	0.25
Total direct labor hours needed	2050	1625	1775	2000	7450
Regular hours	1800	1800	1800	1800	7200
Overtime hours	250	0	0	200	450
Wages for regular hours	$21,600.00	$21,600.00	$21,600.00	$21,600.00	$86,400.00
Overtime Wages	$4,500.00	$0.00	$0.00	$3,600.00	$8,100.00
Total Direct labor cost	$26,100.00	$21,600.00	$21,600.00	$25,200.00	$94,500.00