Tangshang Industries production budget from the 2nd quarter of 2018, projected the following amounts of units to be produced:
April 1,000 units
May 1,200 units
June 1,250 units
Each unit requires 2 parts of component A and 3 parts of component B. Component A cost is $1.25 per unit and component B cost is $.80 per unit.
Each unit requires the following labor:
2 hours in the processing department
1 hour in the assembly department
Processing department labor rate is $4/hour
Assembly department labor rate is $6/hour
Using the information from the production budget of Tangshang Industries
A. Calculate Total Direct Labor Cost in the processing department for the quarter April – June 2018.
B. Calculate Total Direct Labor Cost for June 2018.
C. Calculate Total Direct Labor Cost for the quarter April – June 2018.
|No of budgeted units||1,000||1,200||1,250||3,450|
|x Processing hours per unit||2||2||2||2|
|Total processing labor hours||2,000||2,400||2,500||6,900|
|x Processing labor cost per hour||$ 4||$ 4||$ 4||$ 4|
|Total processing labor cost||$ 8,000||$ 9,600||$ 10,000||$ 27,600|
|Assembling hours per unit||1||1||1||1|
|Total assembling labor hours||1,000||1,200||1,250||3,450|
|x Assembling cost per hour||$ 6||$ 6||$ 6||$ 6|
|Total assembling labor cost||$ 6,000||$ 7,200||$ 7,500||$ 20,700|
|Total direct labor cost||$ 14,000||$ 16,800||$ 17,500||$ 48,300|
A) Total direct labor cost for processing department in the quarter
= $ 8,000 + $ 9,600 + $ 10,000 = $ 27,600
B) Total direct labor cost for June = Labor cost in processing + labor cost in assembling
= $ 10,000 + $ 7,500 = $ 17,500
C) Total Direct Labor Cost for the quarter = Labor cost in processing for the quarter + labor cost in assembling for the quarter
= ($ 8,000 + $ 9,600 + $ 10,000) + ($ 6,000 + $ 7,200 + $ 7,500)
= $ 27,600 + $ 20,700 = $ 48,300