Chapter 9, Problem 9.23AE

Direct labor budget (Learning Objective 2)

Dominion Industries manufactures three models of a product in a single plant with two departments: Cutting and Assembly. The company has estimated costs for each of the three product models: the Economy, the Standard, and the Premium models. The company is currently analyzing direct labor hour requirements for the upcoming year.

	Cutting	Assembly
Estimated hours per unit:
Economy	1.2	2.8
Standard	1.3	2.2
Premium	1.4	2.1
Direct labor hour rate	$10	$12

	Number of units to be produced
Product model:
Economy	510
Standard	700
Premium	860

Requirement

Prepare a direct labor budget for the upcoming year that shows the budgeted direct labor costs for each department and for the company as a whole.