Question

The production manager of Rordan 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	11,000	8,000	8,500	10,800

Each unit requires 0.75 direct labor-hours, and direct laborers are paid $16 per hour.

Required:

1. Complete 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)" answers to 2 decimal places.)

	Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Required production in units Direct labor time per unit (hours) Total direct labor-hours needed Direct labor cost per hour Total direct labor cost

2. Complete the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 8,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 8,000 hours anyway. Any hours worked in excess of 8,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor. (Input all amounts as positive values.)

	Rordan Corporation Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total direct labor-hours needed Regular hours paid Overtime hours paid Wages for regular hours Overtime wages Total direct labor cost

Answer 1

	Rordan Corporation
	Direct Labor Budget
		1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
	Required production in units	11000	8000	8500	10800	38300
	Direct labor time per unit (hours)	0.75	0.75	0.75	0.75	0.75
	Total direct labor-hours needed	8250	6000	6375	8100	28725
	Direct labor cost per hour	16.00	16.00	16.00	16.00	16.00
	Total direct labor cost	132000	96000	102000	129600	459600
	Rordan Corporation
	Direct Labor Budget
		1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
	Total direct labor-hours needed	8250	6000	6375	8100	28725
	Regular Hours Paid	8000	8000	8000	8000	32000
	Overtime Hours Paid	250	0	0	100	350
	Wages for Regular Hours	1,28,000	1,28,000	1,28,000	1,28,000	5,12,000	(Regular Pay Rate*Regular Hours Paid)
	Overtime Wages	6000	0	0	2400	5,600	(Regular Pay Rate*1.5*Overtime Hours Paid)
	Total Direct Labor Cost	1,34,000	1,28,000	1,28,000	1,30,400	5,17,600