Question

Question 4:

McCluskey Company’s production requirements are as follows:

	January	February	March	Quarter
Units to be produced	5,000	6,000	7,000	18,000

Each unit requires two direct labour hours to produce and workers are paid $15.00 per hour.

Required:

1. Assuming a completely flexible labour force, prepare the company’s direct labour budget for the quarter.

1. Refer to the original data. Assume the company has permanent employees who are guaranteed to be paid for at least 11,500 hours of work per month. If production requires less than 11,500 hours, they will be paid for 11,500 hours anyway. Any amount of work above 11,500 hours will be paid at 1.5 times their normal hourly rate.

Answer 1

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