Question

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
Units to be produced	8,200	6,500	7,100	8,000

Each unit requires 0.25 direct labor-hours, and direct laborers are paid $12.00 per hour.

Required:

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 1,800 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 1,800 hours anyway. Any hours worked in excess of 1,800 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

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Rordan Corporation
Direct Labor Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
not attempted	8,200selected answer correct	6,500selected answer correct	7,100selected answer correct	8,000selected answer correct
Direct labor time per unit (hours)	0.25selected answer correct	0.25selected answer correct	0.25selected answer correct	0.25selected answer correct
Total direct labor-hours needed	2,050selected answer correct	1,625selected answer correct	1,775selected answer correct	2,000selected answer correct
Regular hours	1,800selected answer correct	1,800selected answer correct	1,800selected answer correct	1,800selected answer correct
Overtime hours	250selected answer correct	0selected answer correct	0selected answer correct	200selected answer correct
Wages for regular hours	?	?	?	?	72,000
Overtime wages	?	0selected answer correct	0selected answer correct	?	6,750
Total direct labor cost	$21,750	$18,000	$18,000	$21,000	$78,750

I am having trouble figuring out the "?". Thanks!!

Answer 1

Rordan Corporation Direct Labor Budget
	1st Quarter	2nd Quarter	3rd Quarter	4th Quarter	Year
Units to be produced	8,200	6,500	7,100	8,000
Direct labor time per unit (hours)	0.25	0.25	0.25	0.25
Total direct labor hours needed	2,050	1,625	1,775	2,000
Regular hours	1,800	1,800	1,800	1,800
Overtime hours	250	0	0	200
Wages for regular hours	$21,600 (1,800*$12)	$21,600 (1,800*$12)	$21,600 (1,800*$12)	$21,600 (1,800*$12)	$86,400
Overtime wages	4,500 (250*$12*1.5)	0	0	3,600 (200*$12*1.5)	8,100
Total direct labor costs	$26,100	$21,600	$21,600	$25,200	$94,500