Exercise 239 Rodriguez Inc is preparing its direct labor bud

Exercise 23-9 Rodriguez, Inc., is preparing its direct labor budget for 2017 from the following production budget based on a calendar year. Quarter Units Quarter Units 1 20,360 3 35,200 2 25,280 4 30,170 Each unit requires 1.80 hours of direct labor. Prepare a direct labor budget for 2017. Wage rates are expected to be $18 for the first 2 quarters and $20 for quarters 3 and 4.

(Round Direct labor time per unit answers to 2 decimal places, e.g. 52.28.)

Solution

RODRIQUEZ, INC. Direct Labor Budget For the Year Ending December 31, 2017 1 2 3 4 Year Units to be Produced 20360 25280 35200 30170 Direct Labor Time Per Unit 1.8 1.8 1.8 1.8 Total Required Direct Labor Hours 36648 45504 63360 54306 Direct Labor Cost Per Hour 18 18 20 20 Total Direct Labor Cost 659664 819072 1267200 1086120 3832056