Exercise 8-15 Direct Labor and Manufacturing Overhead Budgets [LO8-5, LO8-6]

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Units to be produced	10,600	9,600	11,600	12,600

Each unit requires 0.30 direct labor-hours and direct laborers are paid $12.50 per hour.

In addition, the variable manufacturing overhead rate is $1.50 per direct labor-hour. The fixed manufacturing overhead is $86,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $26,000 per quarter.

Required:

1. Calculate the companys total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole.

2&3. Calculate the companys total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

Calculate the companys total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. (Round "Direct labor time per unit (hours)" answers to 2 decimal places.)

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Total direct labor cost

REQUIREMENT 2/3

Calculate the companys total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Total manufacturing overhead
Cash disbursements for manufacturing overhead