Question

For Gundy Company, units to be produced are 5,230 in quarter 1 and 6,100 in quarter 2. It takes 2.0 hours to make a finished unit, and the expected hourly wage rate is $15 per hour.

Required:
Prepare a direct labor budget by quarters for the 6 months ending June 30, 2017.

Answer 1

Direct labor budget by quarters for the 6 months ending June 30, 2017

Quarter 1 Quarter 2

Expected Production (units) 5,230 6,100

Hours required per unit 2.0 2.0

Total Expected Hours 10,460 12,200

Cost per Hour $15 $15

Total Cost $156,900 $183,000

Step-by-step explanation:

Total Expected Cost = Total Expected Hours × Total Cost per Hour