10. Three Bears Manufacturing produces an auto-quartz watch movement called OM362. Three Bears expects to sell...

10. Three Bears Manufacturing produces an auto-quartz watch movement called OM362. Three Bears expects to sell 20,000 units of OM362 and to have an ending finished inventory of 5,000 units. Currently, it has a beginning finished inventory of 1,100 units. Each unit of OM362 requires two labor operations, two labor hours of assembling and three labor hours of polishing. The direct labor rate for assembling is $11 per assembling hour and the direct labor rate for polishing is $14.50 per polishing hour.

Calculate the below.

Total units to produce

Total hours of assembly labor

Total cost of assembly labor

Total hours of polishing labor

Total cost of polishing labor

Solutions

Expert Solution

Ans. 1	THREE BEARS MANUFACTURING
	PRODUCTION BUDGET
	Third Quarter
	Expected units to be sold (total)	20000
	Add: Desired ending inventory units	5000
	Total required units	25000
	Less: Beginning inventory units	-1100
	Units to be produced	23900

Ans. 2 & 3	THREE BEARS MANUFACTURING
	Direct Labor Budget
	Assembly Labor
	Budgeted production (units)	23900
	(X) Direct labor hours per unit	2.00
	Total hours of assembly labor	47800
	(X) Wages rate per hour	$11
	Total cost of assembly labor	$525,800

Ans. 4 & 5	THREE BEARS MANUFACTURING
	Direct Labor Budget
	Assembly Labor
	Budgeted production (units)	23900
	(X) Direct labor hours per unit	3.00
	Total hours of assembly labor	71700
	(X) Wages rate per hour	$14.50
	Total cost of assembly labor	$1,039,650

	Total labor hours needed = units to be produced direct labor hours
	Budgeted direct labor cost = Total labor hours needed Wages rate per hour

ekkarill92 answered 1 year ago

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