Or labor hours guaranteed 7 51 the direct labor

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Unformatted text preview: rect Labor Budget - 7-52 Quick Check What would be the total direct labor cost for the quarter if the company follows its no layoff policy, but pays $15 (time-and-a-half) for every hour worked in excess of 1,500 hours in a month? a. $79,500 b. $64,500 c. $61,000 d. $57,000 7-53 Quick Check What would be the total direct labor cost for the quarter if the company follows its no layoff policy, but pays $15 (time-and-a-half) for April May June Quarter every hour worked in excess of 1,500 hours Labor hours required 1,300 2,300 1,450 in a month?Regular hours paid 1,500 1,500 1,500 4,500 800 800 a. $79,500 Overtime hours paid b. $64,500 Total regular hours 4,500 $10 $ 45,000 Total overtime hours 800 $15 $ 12,000 c. $61,000 Total pay $ 57,000 d. $57,000 - 7-54 Learning Objective 6 Prepare a manufacturing overhead budget. 7-55 Manufacturing Overhead Budget • At Royal, manufacturing overhead is applied to units of At Royal, manufacturing overhead is applied to units of product on the basis of direct labor-hours. product on the basis of direct labor-hours. • The variable manufacturing overhead rate is $20 per direct The variable manufacturing overhead rate is $20 per direct labor-hour. labor-hour. • Fixed manufacturing overhead is $50,000 per month, which Fixed manufacturing overhead is $50,000 per month, which iincludes $20,000 of noncash costs (primarily depreciation of ncludes $20,000 of noncash costs (primarily depreciation of plant assets). plant assets). Let’s prepare the manufacturing overhead budget. Let’s prepare the manufacturing overhead budget. 7-56 Manufacturing Overhead Budget Direct Labor Budget. Direct Labor Budget. 7-57 Manufacturing Overhead Budget Total mfg. OH for quarter $251,000 = $49.70 per hour * Total labor-hours required 5,050 * rounded 7-58 Manufacturing Overhead Budget Depreciation is a noncash charge. Depreciation is a noncash charge. 7-59 Ending Finished Goods Inventory Budget Production costs per unit Quantity Cost Direct materials 5.00 lbs. $ 0.40 Direct labor 0.05 hrs. $ 10.00 M...
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This document was uploaded on 03/23/2014.

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