Direct Labor Cost Budget Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows: Junior 1,500 units Pro Striker 6,200 units Production budget Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows: Forming Department Assembly Department Junior 0.16 hour per unit 0.24 hour per unit Pro Striker 0.20 hour per unit 0.30 hour per unit The direct labor rate for each department is as follows: $18.00 per hour $14.00 per hour Forming Department Assembly Department Prepare the direct labor cost budget for July. Ace Racket Company Direct Labor Cost Budget For the Month Ending July 31 Hours required for production: Junior Pro Striker Total Hourly rate Total direct labor cost Forming Department Assembly Department 000001 looooo
Direct Labor Cost Budget Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows: Junior 1,500 units Pro Striker 6,200 units Production budget Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows: Forming Department Assembly Department Junior 0.16 hour per unit 0.24 hour per unit Pro Striker 0.20 hour per unit 0.30 hour per unit The direct labor rate for each department is as follows: $18.00 per hour $14.00 per hour Forming Department Assembly Department Prepare the direct labor cost budget for July. Ace Racket Company Direct Labor Cost Budget For the Month Ending July 31 Hours required for production: Junior Pro Striker Total Hourly rate Total direct labor cost Forming Department Assembly Department 000001 looooo
Chapter1: Financial Statements And Business Decisions
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A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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### Direct Labor Cost Budget
Ace Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for July for the two rackets is as follows:
| | Junior | Pro Striker |
|------------------|--------|-------------|
| Production budget| 1,500 units | 6,200 units |
Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows:
| | Forming Department | Assembly Department |
|------------------------------|--------------------|---------------------|
| **Junior** | 0.16 hour per unit | 0.24 hour per unit |
| **Pro Striker** | 0.20 hour per unit | 0.30 hour per unit |
The direct labor rate for each department is as follows:
- **Forming Department**: $18.00 per hour
- **Assembly Department**: $14.00 per hour
Prepare the direct labor cost budget for July:
#### Ace Racket Company
#### Direct Labor Cost Budget
#### For the Month Ending July 31
| | Forming Department | Assembly Department |
|--------------------------|--------------------|---------------------|
| **Hours required for production:** | | |
| Junior | | |
| Pro Striker | | |
| **Total** | | |
| **Hourly rate** | x $18 | x $14 |
| **Total direct labor cost** | | |
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This transcribed content outlines the manufacturing plan for Ace Racket Company, specifying the production goals, labor requirements, and costs associated with producing two types of tennis rackets. The detailed table helps in understanding how labor hours and costs are calculated within two departments: Forming and Assembly.
Expert Solution
Step 1
Direct Labor cost budget is prepared to ascertain the total direct labor Cost to be incurred during a particular period.
Inorder to prepare such a budget we require budgeted number of units for the period and hours required to produce a single unit. Total hours needed to produce all the units are multiplied by the hourly rate inorder to arrive at the total direct labor cost.
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