Sales Forecast & Product Budget table numbers (units)
April: Budget (880 units) & Sales (805 units)
may: Budget (1,100 units) & Sales (900 units)
june: Budget (1075) & Sales (1025 units)
july : budget (1125 units) & sales (875 units)
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 July April Ending Direct Materials Inventory by Month 1408 lb March April Solve for this value May Solve for this value June Solve for this value 400 1600 2000 800 1200 Direct Materials (Pounds) Direct labor rate Direct materials cost Variable overhead rate $25 per direet labor $18 per hour $3 per pound 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)? Complete this question by entering your answers in the tabs below. Reg 1 Req 2 Reg 3A and 3B Reg 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 880 1,100 | June 1,075 units Budgeted production (units) Direct labor hours per unit (hrs.) Total labor hours needed Direct labor rate (per hour) Budgeted direct labor cost Prepare a factory overheld budget for each month of April, May, and June. May June DELRAY MANUFACTURING Factory Overhead Budget For April, May, and June April Total labor hours needed Variable factory overhead rate per direct labor Budgeted variable overhead Budgeted fixed overhead Total budgeted factory overhead 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 Budgeted production (units) 880 880 units Direct labor hours per unit (hrs.) Total labor hours needed Direct labor rate (per hour) Budgeted direct labor cost
