Question

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,800 7,000 7,400 8,300 Each unit requires 0.55 direct labor-hours, and direct laborers are paid $10.00 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 4,500 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 4,500 hours anyway. Any hours worked in excess of 4,500 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,800 7,000 7,400 8,300 Each unit requires 0.55 direct labor-hours, and direct laborers are paid $10.00 per hour Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced 2. Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 4,500 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 4,500 hours anyway. Any hours worked in excess of 4,500 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company's direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 4,500 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 4,500 hours anyway. Any hours worked in excess of 4,500 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. (Round "Direct labor time per unit (hours)" answers to 2 decimal places.) Show less Rordan Corporation Direct Labor Budget 4th 1st Quarter 2nd Quarter Year Quarter Quarter equired production in units Direct labor time per unit (hours) Total direct labor-hours needed Regular hours Overtime hours Wages for regular hours Overtime wages Total direct labor cost 0 0 45,000 45,000 45,000 45,000180,000 6,075 50,100 45,000$ 45,000S 45,975 $186,075 5,100 0 975

Answer 1

1. Assuminq Direct labor adjusted each quarter Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter4th Quarter Year 8,800 7,000 0.55 8,300 7,400 0.55 4,070 31,500 0.55 17,325 Direct labor time per unit (in hours) (b) Total Direct labor hours needed [c-(ax b)] Direct labor cost per hour (d) Total Direct labor cost (cx d) 0.55 0.55 4,565 10.00 $ 4,840 10.00 $ 48,400 5 10.00 $ 38,500 S 10.00 S 40,700 S 45,650 173,250 2. Assuming Direct labor Non adjusted each quarter Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter d Quarter 4th QuarterYear 7,000 0.55 Units to be produced (a Direct labor time per unit (in hours) (b) Total Direct labor hours needed [c=(ax b)] Regular hours (d) Overtime hours [e (c-d)] Wages for regular hours (d x 10 Overtime wages (ex15) Total Direct labor cost *Overtime rate (10 x 1.5) 8,800 0.55 4,840 4,500 340 45,000 5,100 50,100 15 8,300 0.55 0.55 4,070 4,500 4,500 4,500 65 45,000 975 45,975 45,000 45,000 180,000 6,075 186,075 45,000 45,000

Answer 2

Direct labor budget

	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Production Unit	8800	7000	7400	8300	31500
Labor hour per unit	0.55	0.55	0.55	0.55	0.55
Production labor hour	4840	3850	4070	4565	17325
Rate per hour	10	10	10	10	10
Direct labor cost	48400	38500	40700	45650	173250

Direct labor budget

	1st quarter	2nd quarter	3rd quarter	4th quarter	Year
Production labor hour	4840	3850	4070	4565	17325
Regular hours paid	4500	4500	4500	4500	18000
Overtime hours paid	340			65	405
Wages for regular hours	45000	45000	45000	45000	180000
Overtime wages	5100	0	0	975	6075
Direct labor cost	50100	45000	45000	45975	186075