Tableau DA 7-3: Mini-Case, Prepare direct labor and factory overhead budgets and analyze strategies LO P1 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- 1,200- 900 Budgeted Production Sales Forecast Budgeted Production 600- Sales Forecast 300- April July June May March April May June Ending Direct Materials Inventory by Month 400 Solve for this value Solve for this value Solve for this value 800 1200 1600 2000 Direct Materials (Pounds) Direct labor rate Direct materials cost Variable overhead rate +ableau 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. K% 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 Req 2 Req 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.) Units to produce Direct labor hours needed Cost of direct labor DELRAY MANUFACTURING Direct Labor Budget For April, May, and June April May June 880 1,100 1,075 units < Req 1 Req 2 > 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 Direct labor hours needed (part 1) Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead Factory Overhead Budget For April, May, and June April May June < Req 1 Req 3A and 3B > 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 Units to produce Direct labor hours needed Cost of direct labor Does Not Hire Does Hire 880 880 units < Req 2 Req 4 > 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. 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)? < Req 3A and 3B Req 4 >