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Problem - The production department of Raredon 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
24,000
28,000
25,000
22,000
Each unit requires 1.5 direct labour-hours, and direct labour-hour workers are paid $22 per hour.
In addition, the variable manufacturing overhead rate is $1.50 per direct labour-hour. The fixed manufacturing overhead is $160,500 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $44,500 per quarter.
Required - Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.
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