{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 08s

• the company has a “no layoff” policy so all

Info iconThis preview shows pages 34–48. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: • The Company has a “no layoff” policy so all employees will be paid for 40 hours of work each week. • For purposes of our illustration assume that Royal has a “no layoff” policy, workers are paid at the rate of $10 per hour regardless of the hours worked. • For the next three months, the direct labor workforce will be paid for a minimum of 1,500 hours per month. Let’s prepare the direct labor budget. 8-35 The Direct Labor Budget From production budget. 8-36 The Direct Labor Budget 8-37 The Direct Labor Budget Greater of labor hours required or labor hours guaranteed. 8-38 The Direct Labor Budget 8-39 Manufacturing Overhead Budget • At Royal, manufacturing overhead is applied to units of product on the basis of direct labor hours. • The variable manufacturing overhead rate is $20 per direct labor hour. • Fixed manufacturing overhead is $50,000 per month, which includes $20,000 of noncash costs (primarily depreciation of plant assets). Let’s prepare the manufacturing overhead budget. 8-40 Manufacturing Overhead Budget Direct Labor Budget. 8-41 Manufacturing Overhead Budget Total mfg. OH for quarter $251,000 Total labor hours required 5,050 = $49.70 per hour * * rounded 8-42 Manufacturing Overhead Budget Depreciation is a noncash charge. 8-43 Production costs per unit Quantity Cost Total Direct materials 5.00 lbs. 0.40 $ 2.00 $ Direct labor 0.05 hrs. 10.00 $ 0.50 Manufacturing overhead 0.05 hrs. 49.70 $ 2.49 4.99 $ Budgeted finished goods inventory Ending inventory in units 5,000 Unit product cost 4.99 $ Ending finished goods inventory 24,950 $ Ending Finished Goods Inventory Budget Direct materials budget and information. 8-44 Production costs per unit Quantity Cost Total Direct materials 5.00 lbs. 0.40 $ 2.00 $ Direct labor 0.05 hrs. 10.00 $ 0.50 Manufacturing overhead 0.05 hrs. 49.70 $ 2.49 4.99 $ Budgeted finished goods inventory Ending inventory in units 5,000 Unit product cost 4.99 $ Ending finished goods inventory 24,950 $ Ending Finished Goods Inventory Budget Direct labor budget. 8-45 Production costs per unit Quantity Cost Total Direct materials 5.00 lbs. 0.40 $ 2.00 $ Direct labor 0.05 hrs. 10.00 $ 0.50 Manufacturing overhead 0.05 hrs. 49.70 $ 2.49 4.99 $ Budgeted finished goods inventory Ending inventory in units 5,000 Unit product cost 4.99 $ Ending finished goods inventory ? Ending Finished Goods Inventory Budget Total mfg. OH for quarter $251,000 Total labor hours required 5,050 = $49.70 per hour 8-46 Production costs per unit Quantity Cost Total Direct materials 5.00 lbs. 0.40 $ 2.00 $ Direct labor 0.05 hrs. 10.00 $ 0.50 Manufacturing overhead 0.05 hrs. 49.70 $ 2.49 4.99 $ Budgeted finished goods inventory Ending inventory in units 5,000 Unit product cost 4.99 $ Ending finished goods inventory 24,950 $ Ending Finished Goods Inventory Budget Production Budget. 8-47 Selling and Administrative Expense Budget • At Royal, the selling and administrative expense budget is...
View Full Document

{[ snackBarMessage ]}

Page34 / 61

• The Company has a “no layoff” policy so all...

This preview shows document pages 34 - 48. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online