Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,000 Units to be produced Drect labour time per unit (hours) Total direct labour hours needed Second Quarter 22,200 At the end of the previous quarter there were 2.300 units in finished goods inventory. The desired ending finished goods inventory at the end of each quarter is 10% of the next quarter's budgeted sales. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. Each light requires 0.75 direct labour-hours for assembly and employees are paid $18 per hour. Drect labour cost per hour Total direct labour cost Third Fourth Quarter Quarter 20,100 23,000 Required: Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecast number of units. (Round "Direct labour time per unit" answers to 2 decimal p places. Round "Total direct labour hours needed" answers to whole number.) FORTIN LIMITED Direct Labour Budget First Quarter Second Quarter Third Quarter Fourth Quarter Year
Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited has developed the following estimates for unit sales in the upcoming year. Budgeted unit sales First Quarter 25,000 Units to be produced Drect labour time per unit (hours) Total direct labour hours needed Second Quarter 22,200 At the end of the previous quarter there were 2.300 units in finished goods inventory. The desired ending finished goods inventory at the end of each quarter is 10% of the next quarter's budgeted sales. Management expects sales in the fourth quarter of the upcoming year to be the same as the first quarter of the following year. Each light requires 0.75 direct labour-hours for assembly and employees are paid $18 per hour. Drect labour cost per hour Total direct labour cost Third Fourth Quarter Quarter 20,100 23,000 Required: Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecast number of units. (Round "Direct labour time per unit" answers to 2 decimal p places. Round "Total direct labour hours needed" answers to whole number.) FORTIN LIMITED Direct Labour Budget First Quarter Second Quarter Third Quarter Fourth Quarter Year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Fortin Limited produces and sells a single product, a wearable LED light for runners and cyclists. The analytics group at Fortin Limited
has developed the following estimates for unit sales in the upcoming year.
Budgeted unit sales
First
Quarter
25,000
Units to be produced
Direct labour time per unit (hours)
Total direct labour hours needed
Second
Quarter
22,200
At the end of the previous quarter there were 2.300 units in finished goods inventory. The desired ending finished goods inventory at
the end of each quarter is 10% of the next quarter's budgeted sales. Management expects sales in the fourth quarter of the upcoming
year to be the same as the first quarter of the following year. Each light requires 0.75 direct labour-hours for assembly and employees
are paid $18 per hour.
Direct labour cost per hour
Total direct labour cost
Third
Quarter
Fourth
Quarter
20,100 23,000
Required:
Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each
quarter to match the number of hours required to produce the forecast number of units. (Round "Direct labour time per unit" answers
to 2 decimal places. Round "Total direct labour hours needed" answers to whole number.)
FORTIN LIMITED
Direct Labour Budget
First Quarter Second Quarter Third Quarter Fourth Quarter
Year
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