The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fi scal year:1st Quarter 2nd Quarter 3rd Quarter 4th QuarterUnits to be produced .............................. 8,000 6,500 7,000 7,500Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.Required:1. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the directlabor workforce is adjusted each quarter to match the number of hours required to produce theforecasted number of units produced.2. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the directlabor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforceconsists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work eachquarter. If the number of required direct labor-hours is less than this number, the workers are paid for2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5times the normal hourly rate for direct labor
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
The production manager of Rordan Corporation has submitted the following
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Units to be produced .............................. 8,000 6,500 7,000 7,500
Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.
Required:
1. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the direct
labor workforce is adjusted each quarter to match the number of hours required to produce the
forecasted number of units produced.
2. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the direct
labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce
consists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work each
quarter. If the number of required direct labor-hours is less than this number, the workers are paid for
2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5
times the normal hourly rate for direct labor
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