Question

The Bakery Department of Culbert Dessert Corporation has submitted the following forecast of fruit pies to be produced by quarter for the upcoming fiscal year. First Quarter 9, 100 Second Quarter 12, 100 Third Quarter 10, 100 Fourth Quarter 14, 100 Units to be produced Each unit requires 0.60 direct labour-hours, and direct labour-hour workers are paid $10.00 per hour. In addition, the variable manufacturing overhead rate is $2.00 per direct labour-hour. The fixed manufacturing overhead is $25,750 per quarter. The only non-cash element of manufacturing overhead is depreciation, which is $7,550 per quarter. 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 produced. Culbert Dessert Corporation Direct Labour Budget First Second Third Quarter Quarter 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

Answer 1

1
Direct Labour Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Required production in units	9100	12100	10100	14100	45400
Direct labour time per unit (hours)	0.60	0.60	0.60	0.60	0.60
Total direct labour ­hours needed	5460	7260	6060	8460	27240
Direct labour cost per hour	10.00	10.00	10.00	10.00	10.00
Total direct labour cost	54600	72600	60600	84600	272400
2
Manufacturing Overhead Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Budgeted direct labour-hours	5460	7260	6060	8460	27240
Variable overhead rate	2.00	2.00	2.00	2.00	2.00
Variable manufacturing overhead	10920	14520	12120	16920	54480
Fixed manufacturing overhead	25750	25750	25750	25750	103000
Total manufacturing overhead	36670	40270	37870	42670	157480
Less depreciation	7550	7550	7550	7550	30200
Cash disbursements for manufacturing overhead	29120	32720	30320	35120	127280