Question

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Units to be produced	10,700	9,700	11,700	12,700

Each unit requires 0.25 direct labor-hours and direct laborers are paid $13.00 per hour.

In addition, the variable manufacturing overhead rate is $1.80 per direct labor-hour. The fixed manufacturing overhead is $87,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $27,000 per quarter.

Required:

1. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole.

2&3. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.

Required 1:

	1st quarter	2nd quarter	3rd quarter	4th quarter	year
Total direct labor cost

Required 2&3:

	1st quarter	2nd quarter	3rd quarter	4th quarter	year
Total manufacturing overhead
cash disbursements for manufacturing overhead

Answer 1

Answer-1)-

HRUSKA CORPORATION
TOTAL DIRECT LABOR COSTS
Particulars	First Quarter	Second Quarter	Third Quarter	First Quarter	Year
Total direct labor costs $	42800	38800	46800	50800	179200

Explanation-

HRUSKA CORPORATION
TOTAL DIRECT LABOR COSTS
Particulars	First Quarter	Second Quarter	Third Quarter	First Quarter	Year
Units to be produced (a)	10700	9700	11700	12700	44800
Each units requires hours (b)	0.25	0.25	0.25	0.25	0.25
Budgeted direct labor hours (c=a*b)	2675	2425	2925	3175	11200
Direct labor rate per hour (d)	$13.00	$13.00	$13.00	$13.00	$13.00
Direct labor costs (e=c*d) $	42800	38800	46800	50800	179200

2&3)-

HRUSKA CORPORATION
Manufacturing Overhead budget
Particulars	First Quarter	Second Quarter	Third Quarter	First Quarter	Year
Units to be produced (a)	10700	9700	11700	12700	44800
Each units requires hours (b)	0.25	0.25	0.25	0.25	0.25
Budgeted direct labor hours (c=a*b)	2675	2425	2925	3175	11200
Variable manufacturing overhead rate per DLH (d)	$1.80	$1.80	$1.80	$1.80	$1.80
Variable manufacturing overhead (e=c*d) $	4815	4365	5265	5715	20160
Add:- Fixed manufacturing overhead $	87000	87000	87000	87000	348000
Total manufacturing overhead $	91815	91365	92265	92715	368160
Less:- Depreciation $	27000	27000	27000	27000	108000
Cash disbursements for manufacturing overhead $	64815	64365	65265	65715	260160