The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter. 4th Quarter 9,800 Units to be produced 7,500 7,900 10,200 Each unit requires 0.75 direct labor-hours, and direct laborers are paid $14.00 per hour. Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year. Assume 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. Prepare 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 7,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 7,000 hours anyway. Any hours worked in excess of 7,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter. 4th Quarter 9,800 Units to be produced 7,500 7,900 10,200 Each unit requires 0.75 direct labor-hours, and direct laborers are paid $14.00 per hour. Required: 1. Prepare the company's direct labor budget for the upcoming fiscal year. Assume 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. Prepare 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 7,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 7,000 hours anyway. Any hours worked in excess of 7,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4: Preparing And Using Financial Statements

Section: Chapter Questions

Problem 2EP

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