The manufacturing division manager of Davison Enterprises has submitted the following production forecast (in units) for each quarterof the next fiscal year. The plant produces seats for motorcycles:Third QuarterFirst Quarter10,500Second Quarter9,900Fourth QuarterUnits to be produced10,00010,400Each unit requires 0.50 direct labour-hours, and employees are paid $9 per hour.Required:1. Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted eachquarter to match the number of hours required to produce the forecast number of units.Davison EnterprisesDirect Labour BudgetFirst Quarter Second Quarter Third Quarter Fourth QuarterYearUnits to be producedDirect labour time per unit (hours)Total direct labour hours neededDirect labour cost per hourTotal direct labour cost 2. Prepare the company's direct labour budget for the next fiscal year, assuming that the direct labour workforce is not adjusted eachquarter. Instead, assume that the company's direct labour workforce consists of permanent employees who are guaranteed to be paidfor at least 5,000 hours of work each quarter. If the number of required direct labour-hours is less than this number, the workers arepaid for 5,000 hours anyway. Any hours worked in excess of 5,000 hours in a quarter are paid at a rate of 1.5 times the normal hourlyrate for direct labour. (Do not leave any empty spaces; input a 0 wherever it is required.)Davison EnterprisesDirect Labour BudgetFirst Quarter Second Quarter Third Quarter Fourth QuarterYearTotal direct labour hours neededRegular hours paidOvertime hours paidWages for regular hoursOvertime wagesTotal direct labour cost

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The manufacturing division manager of Davison Enterprises has submitted the following production forecast (in units) for each quarter of the next fiscal year. The plant produces seats for motorcycles: First Quarter Second Quarter Third Quarter 10,000 Fourth Quarter Units to be produced 10,500 9,900 10,400 Each unit requires 0.50 direct labour-hours, and employees are paid $9 per hour. Required: 1. 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. Davison Enterprises Direct Labour Budget First Quarter Second Quarter Third Quarter Fourth Quarter Year Units to be produced Direct labour time per unit (hours) Total direct labour hours needed Direct labour cost per hour Total direct labour cost

The manufacturing division manager of Davison Enterprises has submitted the following production forecast (in units) for each quarter of the next fiscal year. The plant produces seats for motorcycles: First Quarter Second Quarter Third Quarter 10,000 Fourth Quarter Units to be produced 10,500 9,900 10,400 Each unit requires 0.50 direct labour-hours, and employees are paid $9 per hour. Required: 1. 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. Davison Enterprises Direct Labour Budget First Quarter Second Quarter Third Quarter Fourth Quarter Year Units to be produced Direct labour time per unit (hours) Total direct labour hours needed Direct labour cost per hour Total direct labour cost

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 13CE: Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead...

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Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing itsoperating budget for the coming year. Selected data regarding the companys two products areas follows: Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead Ls projected to be 25,000, and fixed manufacturing overhead is expected to be15,000. The estimated cost to produce one unit of the laminated putter head is: a. 42. b. 46. c. 52. d. 62.
Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and 18,000 in February. Each lens consists of 2 pounds of silicon costing $2.50 per pound, 3 oz of solution costing $3 per ounce, and 30 minutes of direct labor at a labor rate of $18 per hour. Desired inventory levels are: Â Prepare a sales budget, production budget. direct materials budget for silicon and solution, and a direct labor budget.
The Silver Star Bicycle Company will manufacture both mens and womens models for its Easy-Pedal bicycles during the next two months. Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts call for 150 mens and 125 womens models to be shipped during the first month and 200 mens and 150 womens models to be shipped during the second month. Additional data are as follows: Last month, the company used a total of 1,000 hours of labor. The companys labor relations policy will not allow the combined total hours of labor (manufacturing plus assembly) to increase or decrease by more than 100 hours from month to month. In addition, the company charges monthly inventory at the rate of 2% of the production cost based on the inventory levels at the end of the month. The company would like to have at least 25 units of each model in inventory at the end of the two months. (Hint: Define variables for production and inventory held in each period for each product. Then use a constraint to define the relationship between these: inventory from end of previous period + produced this period demand this period = inventory at end of this period.) a. Establish a production schedule that minimizes production and inventory costs and satisfies the labor-smoothing, demand, and inventory requirements. What inventories will be maintained and what are the monthly labor requirements? b. If the company changed the constraints so that monthly labor increases and decreases could not exceed 50 hours, what would happen to the production schedule? How much will the cost increase? What would you recommend?
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Each unit requires direct labor of 4.1 hours. The labor rate is $13.75 per hour and next years production is estimated at 75,000 units. What is the amount to be included in next years direct labor budget?
Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
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Lens & Shades sells sunglasses for $37 each and is estimating sales of 21,000 units in January and 19,000 in February. Each lens consist of 2.00 mm of plastic costing $2.50 per mm, 1.7 oz of dye costing $2.80 per ounce. and 0.50 hours direct labor at a labor rate of $18 per unit. Desired inventory levels are: Prepare a sales budget, production budget, direct materials budget for silicon and solution, and a direct labor budget.
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Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?