Question

The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 10,600 2nd Quarter 8,000 Units to be produced 3rd Quarter 8,300 4th Quarter 10,600 Each unit requires 0.25 direct labor-hours, and direct laborers are paid $16.00 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 2,400 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,400 hours anyway. Any hours worked in excess of 2,400 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 oduce 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

Answer 1

1)

RORDAN CORPORATION DIRECT LABOR BUDGET
	1	2	3	4	Year
units to be produced [i]	10600	8000	8300	10600	37500
Direct labor time per unit [ii]	.25	.25	.25	.25	.25
Total direct labor hours needed [iii]=[i*ii]	2650	2000	2075	2650	9375
Direct labor cost per hour [iv]	16	16	16	16	16
Total direct labor cost [iii*iv]	42400	32000	33200	42400	150000

b)

overtime rate = 16*1.50=$ 24 per hour

RORDAN CORPORATION DIRECT LABOR BUDGET
	1	2	3	4	Year
units to be produced [i]	10600	8000	8300	10600
Direct labor time per unit [ii]	.25	.25	.25	.25
Total direct labor hours needed [iii]=[i*ii]	2650	2000	2075	2650
Regular hours	2400	2400	2400	2400
overtime hours	250	0	0	250
wages for regular hours	2400*16= 38400	38400	38400	38400
overtime wages	250*24=6000	0	0	250*24=6000
Total direct labor cost	44400	38400	38400	44400	165600