Question

Roletter Company makes and sells artistic frames for pictures of​ weddings, graduations, and other special events. Ron Kyler​, the​ controller, is responsible for preparing Roletter​'s master budget and has accumulated the following information for 2018​: LOADING...​(Click the icon to view some of the financial​ information.)     LOADING...​(Click the icon to view additional​ information.) Read the requirements LOADING.... Requirement 1. Prepare a production budget and a direct manufacturing labor cost budget for Roletter Company by month and for the first quarter of 2018. You may combine both budgets in one schedule. The direct manufacturing labor cost budget should include​ labor-hours and show the details for each labor cost category. Start the schedule by preparing the production budget and calculating the total hours of direct manufacturing labor time needed for the three months in the​ quarter, then calculate the values for the quarter. Finish by preparing the bottom portion of the schedule for the direct manufacturing labor by​ month, then quarter. ​(Enter the direct manufacturing​ labor-hours per unit to one decimal​ place, X.X. Do not round interim​ calculations, and then enter all amounts in the budget​ [other than the direct manufacturing​ labor-hours per​ unit] to the nearest whole​ number.) Roletter Company Budget for Production and Direct Manufacturing Labor For the Quarter Ended March 31, 2018 January February March Budgeted sales (units) Add target ending finished goods inventory (units) Total requirements (units) Deduct beginning finished goods inventory (units) Units to be produced Direct manufacturing labor-hours per unit Total hours of direct manufacturing labor time needed Enter any number in the edit fields and then click Check Answer. 5 parts remaining Data Table 2018 January February March April May Estimated sales in units 12,000 13,000 9,000 10,000 10,000 Selling price $54.00 $52.50 $52.50 $52.50 $52.50 Direct manufacturing labor-hours per unit 2.0 2.0 1.5 1.5 1.5 Wage per direct manufacturing labor-hour $12.00 $12.00 $12.00 $14.00 $14.00 More Info In addition to​ wages, direct manufacturing​ labor-related costs include pension contributions of ​$0.60 per​ hour, worker's compensation insurance of ​$0.20 per​ hour, employee medical insurance of ​$0.40 per​ hour, and Social Security taxes. Assume that as of January​ 1, 2018​, the Social Security tax rates are​ 7.5% for employers and​ 7.5% for employees. The cost of employee benefits paid by Roletter on its direct manufacturing employees is treated as a direct manufacturing labor cost. Roletter has a labor contract that calls for a wage increase to $ 14 per hour on April​ 1, 2018. New​ labor-saving machinery has been installed and will be fully operational by March​ 1, 2018. Roletter expects to have 17 comma 500 frames on hand at December​ 31, 2017​, and it has a policy of carrying an​ end-of-month inventory of​ 100% of the following​ month's sales plus​ 50% of the second following​ month's sales.

Answer 1

Prepare a production budget for Roletter Company by month and for the first quarter of the year:

Roletter company                                                         Production Budget        For the quarter ending March 31, 2014
Particulars	January	February	March	Total
Sales in unit	12,000	13,000	9,000	34,000
Add: Desired Ending Inventory (100% of next month sales +50% of second following month sales)	17,500	14,000	15,000	15,000
Total Needs	29,500	27,000	24,000	49,000
Less: Beginning Inventory (Ending inventory of previous month)	17,500	17,500	14,000	17,500
Units Produced	12,000	9,500	10,000	31,500

January - (13,000 x 100%) + (9,000 x 50%) = 17,500

February - (9,000 x 100%) + (10,000 x 50%) =14,000

March - (10,000 x 100%) + (10,000 x 50%) = 15,000

Prepare a direct labor budget for Roletter Company by month and for first quarter of the year

Roletter Company                                         Direct labor Budget                              For the quarter ending March 31, 2018
Particulars	January	February	March	Total
Units Produced (a)	12,000	9,500	10,000	31,500
Direct Labor Hours per unit (b)	2.0	2.0	1.5
Total direct Labor Hours (a ) x (b) = (c)	24,000	19,000	15,000	58,000
Wages per Direct Labor Hour(d)	12.00	12.00	12.00
Total Direct Labor costs (e) = (c) x (d)	288,000	228,000	180,000	696,000