Question

For Gundy Company, units to be produced are 5,210 in quarter 1 and 6,500 in quarter 2. It takes 1.5 hours to make a finished unit, and the expected hourly wage rate is $15 per hour.Prepare a direct labor budget by quarters for the 6 months ending June 30, 2020.

Answer 1

Answer and Explanation:

The preparation of the direct labor budget by quarters is presented below:

                                       GUNDY COMPANY

                      Direct Labor Budget, June 30, 2020

                     For the Six Months Ending June 30, 2020

Particulars        Quarter 1          Quarter 2           Six months

Units

produced           5,210                 6,500          

Multiply

Direct labor

time per unit       1.5 hours         1.5 hours

Total

required direct

labors                   7,815             9,750

Multiply Hourly

wage rate             $15                 $15

Total direct

labor cost           $117,225        $146,250         $263,475