Question

How do I prepare a direct labor budget that is similar to Illustration 22.11 of the textbook. (illustration included below) (Please show how you calculated the budget, and round to the nearest hour.)

H C D E F G Serious Business, Inc. The company is preparing its budget for the coming year, 2020. The first step is to plan for the FIRST QUARTER of that 2 coming year. The following information has been gathered from their managers 3 4 Sales Information 5 Period Units 6 November 113,000 Actual 7 December 101,000 Actual 8 January 111,000 Planned 9 February 112,000 Planned | Grading guidelines are on the instructions Grading 10 March 114,000 Planned 11 tab. April 124,000 Planned 12 May 136,000 Planned 13 Unit selling price $ 12.00 14 15 Finished Goods Inventory Planning 16 The company likes to keep 10% of the next month's unit sales in finished goods ending inventory. 17 18 Accounts Receivable & Collections 19 Sales on Account 100% ! 20 Collections Activity 21 Month of Sale 85% 22 Month after Sale 15% 23 Balance at 12/31/19 $ 185,000.00 24

Illustration 22.11 below

Answer 1

Direct Labor Budget
			January	February	March	Q1
Units to be produced			111100	112200	115000	338300
DL Hours (9 Mins / 60)			0.15	0.15	0.15	0.15
Total DL hours required			16665	16830	17250	50745
DL Rate per hour			$             7.00	$             7.00	$             7.00	$             7.00
Total DL cost			$ 116,655.00	$ 117,810.00	$ 120,750.00	$ 355,215.00