EXERCISE 8-15 Direct Labor and Manufacturing Overhead Budgets LO8-5, LO8-6 The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced. 2. 1st Quarter 3. 12,000 2nd Quarter 3rd Quarter 10,000 13,000 Each unit requires 0.2 direct labor-hours and direct laborers are paid $12.00 per hour. In addition, the variable manufacturing overhead rate is $1.75 per direct labor-hour. The fixed manufacturing overhead is $86,000 per quarter. The only noncash element of manufacturing over- head is depreciation, which is $23,000 per quarter. Required: 1. 4th Quarter 14,000 Calculate the company's total estimated direct labor cost for each quarter of the the upcom- ing fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced (Hint: Refer to Schedule 4 for guidance). Calculate the company's total estimated manufacturing overhead cost for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance). Calculate the company's cash disbursements for manufacturing overhead for each quarter of the the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance).
EXERCISE 8-15 Direct Labor and Manufacturing Overhead Budgets LO8-5, LO8-6 The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced. 2. 1st Quarter 3. 12,000 2nd Quarter 3rd Quarter 10,000 13,000 Each unit requires 0.2 direct labor-hours and direct laborers are paid $12.00 per hour. In addition, the variable manufacturing overhead rate is $1.75 per direct labor-hour. The fixed manufacturing overhead is $86,000 per quarter. The only noncash element of manufacturing over- head is depreciation, which is $23,000 per quarter. Required: 1. 4th Quarter 14,000 Calculate the company's total estimated direct labor cost for each quarter of the the upcom- ing fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced (Hint: Refer to Schedule 4 for guidance). Calculate the company's total estimated manufacturing overhead cost for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance). Calculate the company's cash disbursements for manufacturing overhead for each quarter of the the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:EXERCISE 8-15 Direct Labor and Manufacturing Overhead Budgets LO8-5, LO8-6
The Production Department of Hruska Corporation has submitted the following forecast of units to
be produced by quarter for the upcoming fiscal year:
Units to be produced.
2.
1st Quarter
3.
12,000
2nd Quarter 3rd Quarter
10,000
13,000
Each unit requires 0.2 direct labor-hours and direct laborers are paid $12.00 per hour.
In addition, the variable manufacturing overhead rate is $1.75 per direct labor-hour. The fixed
manufacturing overhead is $86,000 per quarter. The only noncash element of manufacturing over-
head is depreciation, which is $23,000 per quarter.
Required:
1.
4th Quarter
14,000
Calculate the company's total estimated direct labor cost for each quarter of the the upcom-
ing fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted
each quarter to match the number of hours required to produce the estimated number of units
produced (Hint: Refer to Schedule 4 for guidance).
Calculate the company's total estimated manufacturing overhead cost for each quarter of the
upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance).
Calculate the company's cash disbursements for manufacturing overhead for each quarter
of the the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for
guidance).
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