In: Accounting
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 | 10,300 | 9,300 | 11,300 | 12,300 |
Each unit requires 0.25 direct labor-hours and direct laborers are paid $12.00 per hour.
In addition, the variable manufacturing overhead rate is $1.60 per direct labor-hour. The fixed manufacturing overhead is $83,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $23,000 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. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.
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.