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28 November, 17:30

Addison Co. budgets production of 2,400 units during the second quarter. Other information is as follows: Direct labor Each finished unit requires 4 direct labor hours, at a cost of $20 per hour. Variable overhead Applied at the rate of $11 per direct labor hour. Fixed overhead Budgeted at $450,000 per quarter. 1. Prepare a direct labor budget. 2. Prepare a factory overhead budget.

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  1. 28 November, 19:45
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    1. Total direct labor: $192,000

    2. Total factory overhead budget: $555,600

    Explanation:

    1. Total direct labor

    Addison Co.

    Direct labour budget for the second quarter

    Budgeted production units 2,400

    Direct labor hour per one unit 4

    Total direct labor hour needed 9,600

    Cost per one direct labor 20

    Total direct labor $192,000

    2. Total factory overhead budget:

    Addison Co.

    Factory overhead budget for the second quarter

    Total direct labor hours needed 9,600

    Variable rate per direct labor 11

    Budgeted variable overhead $105,000

    Budgeted fixed overhead $450,000

    Total factory overhead $555,000
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