Question

MatchPoint Racket Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for March for the two rackets is as follows: Junior Pro Striker Production budget 2,200 units 7,000 units Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows: Forming Department Assembly Department Junior 0.10 hour per unit 0.20 hour per unit Pro Striker 0.15 hour per unit 0.25 hour per unit The direct labor rate for each department is as follows: Forming Department $15.00 per hour Assembly Department $14.00 per hour Prepare the direct labor cost budget for March. MatchPoint Racket Company Direct Labor Cost Budget For the Month Ending March 31 Forming Department Assembly Department Hours required for production: Junior Pro Striker Total hours required Hourly rate x $ x $ Total direct labor cost $ $

Answer 1

Answer:

Explanation:

MatchPoint Racket Company

Direct labour Production Budget.

A. Junior.

Forming Department = 0.10 hours per unit

Assembly Department = 0.20 hour per unit

Direct labor rate: Forming Department = $15.00 per hour

Direct Labour rate: Assembly Department = $14.00 per hour

Labour cost per unit =

Forming = $15 x 0.1 =$1.5

Assembly = $14 x 0.2 = $2.8

Total Per unit = $4.3

Unit produced = 2,200

Labour cost for March = $9,460

PRO

Forming Department = 0.15 hours per unit

Assembly Department = 0.25 hour per unit

Direct labor rate: Forming Department = $15.00 per hour

Direct Labour rate: Assembly Department = $14.00 per hour

Labour cost per unit =

Forming = $15 x 0.15 =$2.25

Assembly = $14 x 0.25 = $3.50

Total Per unit = $5.75

Unit produced = 7,000

Labour cost for March = $40,250

B. MatchPro total labour costs

Forming = ($2.25 x 7,000) + ($1.50 x 2,200) = ($15,750 + $3,300) = $19,050

Assembly = ($3.50 x 7,000) + ($2.80 x 2,200) = ($24,500 + $6,160) = $30,660

Total = $49,710

Total produced = 9,200

Labour cost per Unit in forming= $2.07

Labour cost per Unit in Assembly = $3.33

Total Labour cost per unit = $5.40

C.

Production hours required

Forming = (0.10 x 2,200) + (0.15 x 7,000) = 220 + 1,050 = 1,270 hours

Assembly = (0.20 x 2,200) + (0.25 x 7,000) = 440 + 1,750 = 2,190 hours

Total = 3,460 hours

Production hour per unit = 3,460 / 9,200 = 0.38 hours per unit