Question

In: Accounting

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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