Question

Exercise 22-09 (Video)

Wildhorse, Inc., is preparing its direct labor budget for 2020 from the following production budget based on a calendar year.

Quarter		Units		Quarter		Units
1		20,370		3		35,450
2		25,350		4		30,180

Each unit requires 1.80 hours of direct labor.

Prepare a direct labor budget for 2020. Wage rates are expected to be $16 for the first 2 quarters and $18 for quarters 3 and 4. (Round Direct labor time per unit answers to 2 decimal places, e.g. 52.50.)

WILDHORSE, INC. Direct Labor Budget December 31, 2020For the Quarter Ending December 31, 2020For the Year Ending December 31, 2020
		Quarter
		1		2		3		4		Year
Cost Per PoundDirect Labor Cost Per HourDirect Materials PurchasesEnding Direct MaterialsTotal Cost of Direct Materials PurchasesTotal Direct Labor CostTotal Required Direct Labor HoursUnits to be ProducedBeginning Direct MaterialsDirect Labor Time (Hours) Per Unit
Direct Materials PurchasesUnits to be ProducedDirect Labor Cost Per HourTotal Required Direct Labor HoursBeginning Direct MaterialsTotal Cost of Direct Materials PurchasesTotal Direct Labor CostCost Per PoundDirect Labor Time (Hours) Per UnitEnding Direct Materials
Beginning Direct MaterialsEnding Direct MaterialsTotal Required Direct Labor HoursTotal Cost of Direct Materials PurchasesCost Per PoundDirect Labor Time (Hours) Per UnitTotal Direct Labor CostUnits to be ProducedDirect Labor Cost Per HourDirect Materials Purchases
Beginning Direct MaterialsEnding Direct MaterialsCost Per PoundTotal Cost of Direct Materials PurchasesUnits to be ProducedDirect Labor Time (Hours) Per UnitDirect Materials PurchasesDirect Labor Cost Per HourTotal Direct Labor CostTotal Required Direct Labor Hours		$		$		$		$
Beginning Direct MaterialsTotal Direct Labor CostDirect Labor Time (Hours) Per UnitDirect Labor Cost Per HourTotal Required Direct Labor HoursUnits to be ProducedEnding Direct MaterialsCost Per PoundTotal Cost of Direct Materials PurchasesDirect Materials Purchases		$		$		$		$		$

Answer 1

WILDHORSE, INC.
Direct Labor Budget

For the Year Ending December 31, 2020

	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Units to be produced (i)	20,370	25,350	35,450	30,180
Direct labor hours per unit (ii)	1.80	1.80	1.80	1.80
Total required direct labor hours (i) x (ii) = (iii)	36,666	45,630	63,810	54,324
Direct labor cost per hour (iv)	$16	$16	$18	$18
Total direct labor cost (iii) x (iv)	$586,656	$730,080	$1,148,580	$977,832	$3,443,148