Question
Exercise 8-15 (Static) Direct Labor and Manufacturing Overhead Budgets [LO8-5, LO8-6] The Production Department of Hruska Corporation has submitted the following forecast of units to
Exercise 8-15 (Static) 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 | 12,000 | 10,000 | 13,000 | 14,000 |
Each unit requires 0.2 direct labor-hours and direct laborers are paid $16.00 per hour.
In addition, the variable manufacturing overhead rate is $1.75 per direct labor-hour. The fixed manufacturing overhead is $86,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $23,000 per quarter.
Required:
1. Calculate the companys total estimated direct labor cost for each quarter of the the upcoming fiscal year and for the year as a whole.
2. and 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.
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Corporate Finance Core Principles and Applications
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford
3rd edition
978-0077971304, 77971302, 978-0073530680, 73530689, 978-0071221160, 71221166, 978-0077905200
