Delray Manufacturing needs to better budget and analyze costs. While Delray has experienced high sales growth, it has struggled to effectively manage costs and inventories. Delray aims to end each month with direct materials inventory equal to 40% of next month's production needs. Each finished unit requires 4 pounds of direct materials and 2 hours of direct labor. Delray budgets $12,000 of fixed overhead costs per month. A Tableau Dashboard is provided to aid our analysis. Sales Forecast & Production Budget (in Units) 1,500 Budgeted Production Sales Forecast 1,200 Budgeted Production 900 Sales Forecast 600 300 0 April May June July Ending Direct Materials Inventory by Month March April Solve for this value May Solve for this value June Solve for this value 0 400 800 1200 1600 1600 2000 Direct Materials (Pounds) Ending Direct Materials Inventory by Month March April Solve for this value May Solve for this value June Solve for this value 0 400 800 1200 1600 2000 Direct Materials (Pounds) Direct labor rate Direct materials cost Variable overhead rate My ** + ableau To 1. Prepare a direct labor budget for each month of April, May, and June. 2. Prepare a factory overhead budget for each month of April, May, and June. 3. The company is considering hiring more skilled workers. These workers would increase the direct labor rate to $21 per hour, and reduce direct labor hours required per finished good to 1.5 hours. Compute the direct labor budget for April assuming the company (a) does not hire more skilled workers and (b) hires more skilled workers. 4. The company is considering hiring more skilled workers. These workers would increase the direct labor rate to $21 per hour, and reduce direct labor hours required per finished good to 1.5 hours. How would this change to more skilled workers impact total budgeted factory overhead (assuming the budgeted variable overhead rate is unchanged)? Req 1 Reg 2 Reg 3A and 3B Req 4 Prepare a direct labor budget for each month of April, May, and June. (Enter your direct labor hours (hrs.) per unit in two decimal places.) DELRAY MANUFACTURING Direct Labor Budget For April, May, and June April May June 880 1,100 1,075 units Budgeted production (units) Materials to be purchased Total labor hours needed Budgeted direct labor cost Req 1 Req 2 Req 3A and 3B Req 4 Prepare a factory overhead budget for each month of April, May, and June. DELRAY MANUFACTURING Factory Overhead Budget For April, May, and June April May June Total labor hours needed Budgeted variable overhead Budgeted fixed overhead Total budgeted factory overhead Req 1 Req 2 Req 3A and 3B Req 4 The company is considering hiring more skilled workers. These workers would increase the direct labor rate to $21 per hour, and reduce direct labor hours required per finished good to 1.5 hours. Compute the direct labor budget for April assuming the company (a) does not hire more skilled workers and (b) hires more skilled workers. DELRAY MANUFACTURING Direct Labor Budget for April Does Not Hire Does Hire 880 880 units Budgeted production (units) Total labor hours needed Budgeted direct labor cost Req 1 Reg 2 Req 3A and 3B Req 4 The company is considering hiring more skilled workers. These workers would increase the direct labor rate to $21 per hour, and reduce direct labor hours required per finished good to 1.5 hours. How would this change to more skilled workers impact total budgeted factory overhead (assuming the budgeted variable overhead rate is unchanged)? How would this change to more skilled workers impact total budgeted factory overhead (assuming the budgeted variable overhead rate is unchanged)?
