Question

Prepare a production budget and a direct manufacturing labor cost budget for

PetersonPeterson

Company by month and for the first quarter of

20182018.

You may combine both budgets in one schedule. The direct manufacturing labor cost budget should include​ labor-hours and show the details for each labor cost category.

Start the schedule by preparing the production budget and calculating the total hours of direct manufacturing labor time needed for the three months in the​ quarter, then calculate the values for the quarter. Finish by preparing the bottom portion of the schedule for the direct manufacturing labor by​ month, then quarter. ​(Enter the direct manufacturing​ labor-hours per unit to one decimal​ place, X.X. Do not round interim​ calculations, and then enter all amounts in the budget​ [other than the direct manufacturing​ labor-hours per​ unit] to the nearest whole​ number.)

Peterson Company
Budget for Production and Direct Manufacturing Labor
For the Quarter Ended March 31, 2018
	January	February	March
Budgeted sales (units)
Add target ending finished goods inventory (units)
Total requirements (units)
Deduct beginning finished goods inventory (units)
Units to be produced
Direct manufacturing labor-hours per unit
Total hours of direct manufacturing labor time needed

	2018
	January	February	March	April	May
Estimated sales in units	14,000	18,000	9,000	10,000	10,000
Selling price	$55.00	$51.50	$51.50	$51.50	$51.50
Direct manufacturing labor-hours per unit	3.5	3.5	1.5	1.5	1.5
Wage per direct manufacturing labor-hour	$12.00	$12.00	$12.00	$11.00	$11.00

Answer 1

		January	February	March	April	May
Estimated sales in units		14,000	18,000	9,000	10,000	10,000
Selling Price		$        55.00	$        51.50	$     51.50	$        51.50	$        51.50
Direct Manufacturing labor hours per unit	A	3.5	3.5	1.5	1.5	1.5
Wage per direct manufacturing labor hour	B	$        12.00	$        12.00	$     12.00	$        11.00	$        11.00
Wage per unit	A X B	$        42.00	$        42.00	$     18.00	$        16.50	$        16.50

		January	February	March
Budgeted Sales (Units)		14,000	18,000	9,000
Target ending FG inventory		-	-	-
Total Requirement		14,000	18,000	9,000
Beginning FG Inventory		-	-	-
Units to be produced	A	14,000	18,000	9,000
Direct Manufacturing Labor hours per unit	B	3.5	3.5	1.5
Total Hours of labor time needed	A X B	49,000	63,000	13,500
Wage per direct manufacturing labor hour		$              12.00	$              12.00	$              12.00
Total Budgeted Labor Cost		$        588,000	$        756,000	$        162,000

		Quarter 1
Budgeted Sales (Units)		41,000
Target ending FG inventory		-
Total Requirement		41,000
Beginning FG Inventory		-
Units to be produced	A	41,000
Direct Manufacturing Labor hours per unit	B	9
Total Hours of labor time needed	A X B	125,500
Wage per direct manufacturing labor hour		36
Total Budgeted Labor Cost		1,506,000

Note- There are no details of opening or closing inventory in the question posted here.