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Klio2033 [76]
3 years ago
6

Addison Co. budgets production of 2,750 units during the second quarter. Other information is as follows: Direct labor Each fini

shed unit requires 3 direct labor hours, at a cost of $7 per hour. Variable overhead Applied at the rate of $9 per direct labor hour. Fixed overhead Budgeted at $540,000 per quarter. 1. Prepare a direct labor budget. 2. Prepare a factory overhead budget.
Business
1 answer:
Ilya [14]3 years ago
5 0

Answer:

Direct Labor Hours   Budget        8250

Direct Labor Costs Budget          $ 57750

Factory Overhead Budget  $ 614250

Explanation:

<em>We multiply the direct labor hours per unit to the number of units to get the total direct labor hours  which are again multiplied with the direct labor cost per hour to get the total direct labor costs.</em>

Addison Co.

Direct Labor Budget

                                           Quarter II

Production units                2750

<u>Direct Labor per unit            3        </u>

Direct Labor Hours           8250

<u>Direct Labor Cost / Hr         $7        </u>

Direct Labor Costs           $ 57750

We multiply the direct labor costs  with variable overhead per hour to get the variable costs which are added to the fixed costs per quarter to get the total factory overhead budget.

Addison Co.

Factory Overhead  Budget

                                           Quarter II

Direct Labor Hours           8250

<u>Variable OH / Hr                 $ 9         </u>

Variable Overheads        $ 74250

<u>+Fixed Overheads             $ 540,000</u>

Factory Overhead Budget  $ 614250

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Answer:

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