Preparing a Direct Labor Budget Patrick Inc. makes industrial solvents. Planned production in units for the first three months of the coming year is: January 40,000 February 50,000 March 60,000 Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $17.50 per hour. Required:
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.
Preparing a Direct Labor Budget
Patrick Inc. makes industrial solvents. Planned production in units for the first three months of the coming year is:
| January | 40,000 |
| February | 50,000 |
| March | 60,000 |
Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $17.50 per hour.
Required:
Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer.
| Direct Labor Budget: | January | February | March | Total |
| Units to be produced | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | fill in the blank 4 |
| Direct labor hrs per unit | fill in the blank 5 | fill in the blank 6 | fill in the blank 7 | fill in the blank 8 |
| Total direct labor hrs | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 | fill in the blank 12 |
| Wage rate | $fill in the blank 13 | $fill in the blank 14 | $fill in the blank 15 | $fill in the blank 16 |
| Direct labor cost | $fill in the blank 17 | $fill in the blank 18 | $fill in the blank 19 | $fill in the blank 20 |
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