Question

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year Units to be produced 1st Quarter 10,600 2nd Quarter 8,500 3rd Quarter 7, eee 4th Quarter 11,100 Each unit requires 0.35 direct labor hours, and direct laborers are paid $2000 per hour Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year. Assume 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. Prepare 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 3,000 hours of work each quarter. If the number of required direct labor-hours is less than this number the workers are paid for 3,000 hours anyway Any hours worked in excess of 3,000 hours in a quarter are paid at the rate of 15 times the normal hourly rate for direct labor. Complete this question by entering your answers in the tabs below.

Answer 1

Part 1

Rordan Corporation
Direct Labour Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units Required	10,600	8,500	7,000	11,100	37,200
Direct Labour Hour per unit ( In hours )	0.35	0.35	0.35	0.35	0.35
Total direct labour hours needed	3,710	2,975	2,450	3,885	13,020
Regular hours paid per hour	20	20	20	20	20
Total direct labour cost	74,200	59,500	49,000	77,700	260,400

Part 2

Rordan Corporation
Direct Labour Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Total direct labour hours needed	3,710	2,975	2,450	3,885	13,020
Regular hours paid	3,000	3,000	3,000	3,000	12,000
Overtime hours paid	710	0	0	885	1,595
Wages for Regular hours	60,000	60,000	60,000	60,000	240,000
Overtime Wages	21,300	0	0	26,550	47,850
Total direct labour cost	81,300	60,000	60,000	86,550	287,850