EXERCISE 8-15 Direct Labor and Manufacturing Overhead Budgets [@ LO8-5, Q 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: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 12,000 10,000 13,000 14,000 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 overhead is depreciation, which is $23,000 per quarter. Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted ntch the numher of hours reguired to produce the forecasted number of units produced.
EXERCISE 8-15 Direct Labor and Manufacturing Overhead Budgets [@ LO8-5, Q 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: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 12,000 10,000 13,000 14,000 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 overhead is depreciation, which is $23,000 per quarter. Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted ntch the numher of hours reguired to produce the forecasted number of units produced.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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