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 11,300 10,300 12,300 13,300 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 $1.60 per direct labor-hour. The fixed manufacturing overhead is $93,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $33,000 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.

Answer 1

Answer-1)-

HRUSKA CORPORATION
TOTAL DIRECT LABOR COSTS
Particulars	First Quarter	Second Quarter	Third Quarter	First Quarter	Year
Total direct labor costs $	43875	40125	47625	51375	183000

Explanation-

HRUSKA CORPORATION
TOTAL DIRECT LABOR COSTS
Particulars	First Quarter	Second Quarter	Third Quarter	First Quarter	Year
Units to be produced (a)	11300	10300	12300	13300	47200
Each units requires hours (b)	0.25	0.25	0.25	0.25	0.25
Budgeted direct labor hours (c=a*b)	2825	2575	3075	3325	11800
Direct labor rate per hour (d)	$13.00	$13.00	$13.00	$13.00	$13.00
Direct labor costs (e=c*d) $	36725	33475	39975	43225	153400

2&3)-

HRUSKA CORPORATION
Manufacturing Overhead budget
Particulars	First Quarter	Second Quarter	Third Quarter	First Quarter	Year
Units to be produced (a)	11300	10300	12300	13300	47200
Each units requires hours (b)	0.25	0.25	0.25	0.25	0.25
Budgeted direct labor hours (c=a*b)	2825	2575	3075	3325	11800
Variable manufacturing overhead rate per DLH (d)	$1.60	$1.60	$1.60	$1.60	$1.60
Variable manufacturing overhead (e=c*d) $	4520	4120	4920	5320	18880
Add:- Fixed manufacturing overhead $	93000	93000	93000	93000	372000
Total manufacturing overhead $	97520	97120	97920	98320	390880
Less:- Depreciation $	33000	33000	33000	33000	132000
Cash disbursements for manufacturing overhead $	64520	64120	64920	65320	258880