Direct Labor and Manufacturing Overhead Budgets L08—5, LOB—6 The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Each unit requires 02 direct labor-hours and direct laborers are paid $1200 per hour In addition, the variable manufacturing overhead rate is $1 .75 per direct labor-hour. The fixed manufacturing overhead is S 86,000 per quarter. The only noncash element of manufacturing overhead is depreciation , which is $23,000 per quarter. Required: 1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the ‘ear as a whole. Assume that the direct Labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced (Hint: Refer to Schedule 4 for guidance). 2. Calculate the company’s total estimated manufacturing overhead cost for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance). 3. Calculate the company’s cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance).
Direct Labor and Manufacturing Overhead Budgets L08—5, LOB—6 The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Each unit requires 02 direct labor-hours and direct laborers are paid $1200 per hour In addition, the variable manufacturing overhead rate is $1 .75 per direct labor-hour. The fixed manufacturing overhead is S 86,000 per quarter. The only noncash element of manufacturing overhead is depreciation , which is $23,000 per quarter. Required: 1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the ‘ear as a whole. Assume that the direct Labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced (Hint: Refer to Schedule 4 for guidance). 2. Calculate the company’s total estimated manufacturing overhead cost for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance). 3. Calculate the company’s cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance).
Solution Summary: The author explains how to determine the direct estimated cost for each quarter and the cash disbursement for manufacturing overheads.
Direct Labor and Manufacturing Overhead Budgets L08—5, LOB—6 The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
Each unit requires 02 direct labor-hours and direct laborers are paid $1200 per hour In addition, the variable manufacturing overhead rate is $1 .75 per direct labor-hour. The fixed manufacturing overhead is S 86,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $23,000 per quarter. Required: 1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the ‘ear as a whole. Assume that the direct Labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced (Hint: Refer to Schedule 4 for guidance). 2. Calculate the company’s total estimated manufacturing overhead cost for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance). 3. Calculate the company’s cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole (Hint: Refer to Schedule 5 for guidance).
Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.
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