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	11,700	10,700	12,700	13,700

Each unit requires 0.25 direct labor-hours and direct laborers are paid $15.00 per hour.

In addition, the variable manufacturing overhead rate is $1.80 per direct labor-hour. The fixed manufacturing overhead is $97,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $37,000 per quarter.

Required:

1. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Round "Direct labor time per unit (hours)" and "Direct labor cost per hour" answers to 2 decimal places.)

2. Prepare the company’s manufacturing overhead budget.

Answer 1

Hruska Corporation
Direct Labor Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Required production in units	11700	10700	12700	13700	48800
Direct labor time per unit (hours)	0.25	0.25	0.25	0.25	0.25
Total direct labor­hours needed	2925	2675	3175	3425	12200
Direct labor cost per hour	15.00	15.00	15.00	15.00	15.00
Total direct labor cost	43875	40125	47625	51375	183000
2
Hruska Corporation
Manufacturing Overhead Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Variable manufacturing overhead	5265	4815	5715	6165	21960
Fixed manufacturing overhead	97000	97000	97000	97000	388000
Total manufacturing overhead	102265	101815	102715	103165	409960
Less depreciation	37000	37000	37000	37000	148000
Cash disbursements for manufacturing overhead	65265	64815	65715	66165	261960