### Construct the Direct Labor Budget| | Year 2 Quarter | | | | | ||-------------------------------------|----------------|------------|------------|------------|-----------|------|| | 1 | 2 | 3 | 4 | Year | || Required production (units) | ? | ? | ? | ? | ? | || Direct labor-hours per unit | ? | ? | ? | ? | | || Total direct labor-hours needed | ? | ? | ? | ? | | || Direct labor cost per hour | ? | ? | ? | ? | | || Total direct labor cost | ? | ? | ? | ? | ? | |**Explanation:**This table is designed to help construct a direct labor budget for Year 2. It breaks down each quarter's and the entire year's labor requirements and expenses into several key components:1. **Required Production (units):** This row indicates how many units need to be produced each quarter and for the entire year. 2. **Direct Labor-Hours per Unit:** This row shows the number of labor hours required to produce one unit.3. **Total Direct Labor-Hours Needed:** This row calculates the total number of direct labor hours required each quarter by multiplying the required production by the direct labor-hours per unit.4. **Direct Labor Cost per Hour:** This row displays the cost for one hour of direct labor.5. **Total Direct Labor Cost:** This represents the total cost of direct labor for each quarter and for the entire year, calculated by multiplying the total direct labor-hours needed by the direct labor cost per hour.All values are currently placeholders, indicated by question marks (?). **Budgeted Unit Sales and Production Data Overview**This table presents an overview of budgeted unit sales across different quarters, along with associated production data and financial metrics:### Sales Data- **Year 2 Quarter 1**: 40,000 units- **Year 2 Quarter 2**: 60,000 units- **Year 2 Quarter 3**: 100,000 units- **Year 2 Quarter 4**: 50,000 units- **Year 3 Quarter 1**: 70,000 units- **Year 3 Quarter 2**: 80,000 units### Financial and Production Metrics- **Selling Price per Unit**: $12- **Accounts Receivable, Beginning Balance**: $65,000- **Sales Collection**: - 75% collected in the same quarter - 25% collected in the following quarter- **Desired Ending Finished Goods Inventory**: 30% of next quarter's budgeted unit sales### Inventory and Raw Material Requirements- **Finished Goods Inventory, Beginning**: 12,000 units- **Raw Materials Required per Unit**: 5 pounds- **Desired Ending Inventory of Raw Materials**: 10% of next quarter's production needs- **Raw Materials Inventory, Beginning**: 23,000 pounds- **Raw Material Costs**: $0.80 per pound### Payment and Labor- **Raw Materials Purchases Payment**: - 60% in the current quarter - 40% in the following quarter- **Accounts Payable for Raw Materials, Beginning Balance**: $81,500- **Direct Labor Costs**: - Cost: $15 per hour - Time: 0.2 hour per unit### Other Costs- **Variable Manufacturing Overhead (MOH) Rate**: $2 per hour- **Total Fixed MOH**: $60,000- **Variable Selling & Administrative (S&A) Expense Rate**: $1.80 per unit### Financial Policies- **Minimum Cash Balance**: $50,000- **Annual Interest Rate**: 12%This data is crucial for budgeting and forecasting in manufacturing and sales planning, ensuring adequate resource allocation and financial management.

Answered: Construct the direct labor budget

Construct the direct labor budget

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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