The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fi scal year:1st Quarter 2nd Quarter 3rd Quarter 4th QuarterUnits to be produced .............................. 8,000 6,500 7,000 7,500Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.Required:1. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the directlabor workforce is adjusted each quarter to match the number of hours required to produce theforecasted number of units produced.2. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the directlabor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforceconsists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work eachquarter. If the number of required direct labor-hours is less than this number, the workers are paid for2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5times the normal hourly rate for direct labor

Question

The production manager of Rordan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fi scal year:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Units to be produced .............................. 8,000 6,500 7,000 7,500
Each unit requires 0.35 direct labor-hours, and direct laborers are paid $12.00 per hour.
Required:
1. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the direct
labor workforce is adjusted each quarter to match the number of hours required to produce the
forecasted number of units produced.
2. Construct the company’s direct labor budget for the upcoming fiscal year, assuming that the direct
labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce
consists of permanent employees who are guaranteed to be paid for at least 2,600 hours of work each
quarter. If the number of required direct labor-hours is less than this number, the workers are paid for
2,600 hours anyway. Any hours worked in excess of 2,600 hours in a quarter are paid at the rate of 1.5
times the normal hourly rate for direct labor

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