Exercise 4 (Direct Labor Budget) The Production Department of the Laguna Plant of JC Corporation has submitted the following forecast of units to be produced at the plant for each quarter of the upcoming fiscal year. The plant produces high-end outdoor barbeque grills. 1st quarter 2 quarter 3rd quarter 4 quarter Units to be produced..... 5,000 4,400 4,500 4,900 Each unit requires 0.40 direct labor-hours and direct labor-hour workers paid P11 per hour. Required: Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor work force is not adjusted each quarter. Instead, assume that the company's direct labor work force consists of \ permanent employees who are guaranteed to be paid for at least 1,800 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 1,800 hours anyway. Any hours worked in excess of 1,800 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
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.
Exercise 4 (Direct Labor Budget)
The Production Department of the Laguna Plant of JC Corporation has submitted
the following
upcoming fiscal year. The plant produces high-end outdoor barbeque grills.
1st quarter 2 quarter 3rd quarter 4 quarter
Units to be produced..... 5,000 4,400 4,500 4,900
Each unit requires 0.40 direct labor-hours and direct labor-hour workers paid P11
per hour.
Required:
- Construct the company's direct labor budget for the upcoming fiscal year,
assuming that the direct labor work force is adjusted each quarter to
match the number of hours required to produce the forecasted number of
units produced.
- Construct the company's direct labor budget for the upcoming fiscal year,
assuming that the direct labor work force is not adjusted each quarter.
Instead, assume that the company's direct labor work force consists of \
permanent employees who are guaranteed to be paid for at least 1,800
hours of work each quarter. If the number of required direct labor-hours is
less than this number, the workers are paid for 1,800 hours anyway. Any
hours worked in excess of 1,800 hours in a quarter are paid at the rate of
1.5 times the normal hourly rate for direct labor.
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