How do I prepare a direct labor budget that is similar to Illustration 22.11 of the textbook. (illustration included below) (Please show how you calculated the budget, and round to the nearest hour.)
Illustration 22.11 below
H C D E F G Serious Business, Inc. The company is preparing its budget for the coming year, 2020. The first step is to plan for the FIRST QUARTER of that 2 coming year. The following information has been gathered from their managers 3 4 Sales Information 5 Period Units 6 November 113,000 Actual 7 December 101,000 Actual 8 January 111,000 Planned 9 February 112,000 Planned | Grading guidelines are on the instructions Grading 10 March 114,000 Planned 11 tab. April 124,000 Planned 12 May 136,000 Planned 13 Unit selling price $ 12.00 14 15 Finished Goods Inventory Planning 16 The company likes to keep 10% of the next month's unit sales in finished goods ending inventory. 17 18 Accounts Receivable & Collections 19 Sales on Account 100% ! 20 Collections Activity 21 Month of Sale 85% 22 Month after Sale 15% 23 Balance at 12/31/19 $ 185,000.00 24 Materials Inventory Costs & Planning Direct Materials Amount Used per Unit Cost Metal 2 lb $ 1.00 lb The company likes to keep 5% of the material needed for the next month's production in raw materials ending inventory. 100% Accounts Payable & Disbursements Purchases on Account Payment Activity Month of Purchase Month after Purchase Balance at 12/31/19 50% 50% 120,000 $ Direct Labor & Costs Time per Unit Production Pay Rate/Hour $ 9 minutes 7.00 0.30 0.45 0.45 0.25 Manufacturing Overhead Costs Variable costs per direct labor hour Indirect materials Indirect labor Utilities Maintenance Fixed costs per month Salaries Depreciation Property taxes Insurance Janitorial $ 42,000 16,800 2,675 1,200 1,300 $ 1.45 Selling and Administrative Costs Variable costs per unit sold Fixed costs per month Advertising Insurance Salaries Depreciation Other fixed costs 15,000 14,000 72,000 25,000 3,000 Income Taxes Accrued on Monthly Net Income Amounts Accrued Q4 2019, paid January 2020 35% rounded to nearest dollar 200,000 $ Cash and Financing Matters Cash Balance, 12/31/2019 2020 Minimum Balance Required $ 90,000 715,000 $ Monthly Dividends Outstanding Shares 2.25 per share 5,000 Line of Credit Limit None Borrowing Increment Required $ 1,000 Interest Rate Draws First of Month Repayments Last of Month Interest accumulates to the loan balance and is paid in full with each repayment. 9% Additional Item Fixed Asset Purchase Month $ 445,000 February Serious Business, Inc. Sales Budget For the first Quarter January February 111000 112000 12.00 $ 12.00 $1,332,000.00 $ 1,344,000.00 Expected Sales Units Unit Selling Price Total Sales March 114000 $ 12.00 $ 1,368,000.00 Q1 337000 $ 12.00 $ 4,044,000.00 Expected Sales Units Add: Desired Ending Finished Goods Units Total Required Units Less: Beginning Finished Goods Required Production Units Serious Business, Inc. Production Budget For the first Quarter January February 111000 112000 11200 11400 122200 123400 11100 11200 111100 1 12200 March 114000 12400 126400 11400 115000 337000 35000 372000 33700 3 38300 H I J B C D E F G Hayes Company Direct Labor Budget For the Year Ending December 31, 2022 Quarter 3 Units to be produced (illustration 22.5) 3,100 3,600 4,100 Direct labor time (hours) per unit X2 X2 8 Total required direct labor hours 6,200 7,200 8 ,200 9 Direct labor cost per hour X $10 X $10 x $10 10 Total direct labor cost $62,000 $72,000 $82,000 4 Year 4.600 X2 X2 9,200 X $10 $92,000 $308,000
