Question

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 10,600 8,500 7,000 11,100 Each unit requires 0.35 direct labor-hours, and direct laborers are paid $20.00 per hour. Required: 1. Prepare the company’s direct labor budget for the upcoming fiscal year.

Answer 1

Answer and Explanation:

The preparation of the direct labor budget is presented below:

Particulars Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total

Required

Production 10,600 8,500 7,000 11,100 37,200

Multiply with

Direct labor

hours 0.35 0.35 0.35 0.35

Total

direct labors 3,710 2,975 2,450 3,885 13,020

Multiply with

Direct labor

cost $20 $20 $20 $20 $20

Total

direct labor

cost $74,200 $59,500 $49,000 $77,700 $260,400