The manufacturing division manager of Davison Enterprises has submitted the following production forecast (in units) for each quarter of the next fiscal year. The plant produces seats for motorcycles:

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Units to be produced	10,250	9,650	9,750	10,150

Each unit requires 0.50 direct labour-hours, and employees are paid $10 per hour.

A) Prepare the companys direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units.

Davison Enterprise

Direct Labor Budget

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Year
Units to Be Produced
Direct Labor Time Per Unit (hours)
Total Direct Labor hours needed
Direct Labor cost per hour
Total Direct Labor Cost

B) Prepare the companys direct labour budget for the next fiscal year, assuming that the direct labour workforce is not adjusted each quarter. Instead, assume that the companys direct labour workforce consists of permanent employees who are guaranteed to be paid for at least 4,875 hours of work each quarter. If the number of required direct labour-hours is less than this number, the workers are paid for 4,875 hours anyway. Any hours worked in excess of 4,875 hours in a quarter are paid at a rate of 1.5 times the normal hourly rate for direct labour.

Davison Enterprise

Direct Labor Budget

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Year
Total Direct Labour Hours needed
Regular Hours Paid
Overtime Hours Paid
Wages for regular hours
Overtime wages
Total Direct Labor Cost