Answer and Explanation:
a. The computation of the total estimated direct labor cost is shown below:
Particulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Units to be produced 10,700 9,700 11,700 12,700 44,800
Multiply Direct labor hour per unit 0.25 0.25 0.25 0.25 0.25
Total Direct labor hour required 2675 2425 2925 3175 11200
Multiply Direct labor rate per hour $14 $14 $14 $14 $14
Estimated Direct labor cost $37,450 $33,950 $40,950 $44,450 $156,800
b. The total estimated manufacturing cost and the cash disbursement is shown below:
Particulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Units to be produced 10,700 9,700 11,700 12,700 44,800
Direct labor hour per unit 0.25 0.25 0.25 0.25 0.25
Multiply Total Direct labor hour required 2675 2425 2925 3175 11200
Variable manufacturing overhead rate $2 $2 $2 $2 $2
Estimated Variable manufacturing overhead cost $5,350 $4,850 $5,850 $6,350 $22,400
Add: Fixed manufacturing overhead $67,000 $67,000 $67,000 $67,000 $268,000
Total estimated manufacturing overhead $72,350 $71,850 $72,850 $73,350 $290,400
Less: depreciation $16,000 $16,000 $16,000 $16,000 $64,000
Cash disbursement for manufacturing overhead $56,350 $55,850 $56,850 $57,350 $226,400
We simply applied the above format to find out the manufacturing overhead, cash disbursement, and the direct labor cost
