581513259.

xlsx
LFA Jackets Solution

BUDGET #3-LFA Jackets

Part 1. Prepare a Direct Labor Budget Under Assumptions 1-4

Assumption 1
Time each worker spends on a jacket (minutes) 20
# of Workers per team 1
Total time to make a jacket (minutes) 20
Labor rate/hour $ 12.00
Fringe benefits 10%
Fully loaded, or Total Labor Rate $ 13.20
Productive minutes per hour 40
Hours worked per month 160
Full-time workers only (Yes or No) No
June July August Sept
Units to be produced each month 1,485 1,385 1,285 1,020

Direct Labor Budget

Total productive time (in minutes) required to make all jackets 29,700 27,700 25,700 20,400
Total productive time (in hours) required to make all jackets 495.0 461.7 428.3 340.0
Total non-productive time (in hours) incurred each month 247.5 230.8 214.2 170.0
Total Hours required to make all jackets 742.5 692.5 642.5 510.0

# of workers required each month (divide by Hours worked per month) 4.64 4.3 4.0 3.2

If full-time workers only, round up to # or workers per team. Else, leave # of workers
as a fraction. This is the number of workers needed to hire. 4.6 4.3 4.0 3.2

Total Budgeted Direct Labor Cost (multiply # of workers x hours worked per month x Total Labor Rate) $ 9,801.00 $ 9,141.00 $ 8,481.00 $ 6,732.00

Part 1. Prepare a Direct Labor Budget Under Assumptions 1-4

Assumption 2
Time each worker spends on a jacket (minutes) 20
# of Workers per team 1
Total time to make a jacket (minutes) 20
Labor rate/hour $ 12.00
Fringe benefits 10%
Fully loaded, or Total Labor Rate $ 13.20
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Productive minutes per hour 40

Hours worked per month 160
Full-time workers only (Yes or No) Yes
June July August Sept
Units to be produced each month 1,485 1,385 1,285 1,020

Direct Labor Budget

Total productive time (in minutes) required to make all jackets 29,700 27,700 25,700 20,400
Total productive time (in hours) required to make all jackets 495.0 461.7 428.3 340.0
Total non-productive time (in hours) incurred each month 247.5 230.8 214.2 170.0
Total Hours required to make all jackets 742.5 692.5 642.5 510.0

# of workers required each month (divide by Hours worked per month) 4.64 4.33 4.02 3.19
If full-time workers only, round up to # or workers per team. Else, leave # of workers
as a fraction. This is the number of workers needed to hire. 5.00 5.00 5.00 4.00

Total Budgeted Direct Labor Cost (multiply # of workers x hours worked per month x Total Labor Rate) $ 10,560.00 $ 10,560.00 $ 10,560.00 $ 8,448.00

Part 1. Prepare a Direct Labor Budget Under Assumptions 1-4

Assumption 3
Time each worker spends on a jacket (minutes) 9
# of Workers per team 2
Total time to make a jacket (minutes) 18
Labor rate/hour $ 12.00
Fringe benefits 10%
Fully loaded, or Total Labor Rate $ 13.20
Productive minutes per hour 40
Hours worked per month 160
Full-time workers only (Yes or No) Yes
June July August Sept
Units to be produced each month 1,485 1,385 1,285 1,020

Direct Labor Budget

Total productive time (in minutes) required to make all jackets 26,730 24,930 23,130 18,360
Total productive time (in hours) required to make all jackets 445.5 415.5 385.5 306.0
Total non-productive time (in hours) incurred each month 222.8 207.8 192.8 153.0
Total Hours required to make all jackets 668.3 623.3 578.3 459.0
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LFA Jackets Solution

# of workers required each month (divide by Hours worked per month) 4.18 3.90 3.61 2.87

# of Teams required 3.00 2.00 2.00 2.00

Number of workers needed to hire. 6.00 4.00 4.00 4.00

Total Budgeted Direct Labor Cost (multiply # of workers x hours worked per month x Total Labor Rate) $ 12,672.00 $ 8,448.00 $ 8,448.00 $ 8,448.00

Part 1. Prepare a Direct Labor Budget Under Assumptions 1-4

Assumption 4
Time each worker spends on a jacket (minutes) 6
# of Workers per team 3
Total time to make a jacket (minutes) 18
Labor rate/hour $ 12.00
Fringe benefits 10%
Fully loaded, or Total Labor Rate $ 13.20
Productive minutes per hour 40
Hours worked per month 160
Full-time workers only (Yes or No) Yes
June July August Sept
Units to be produced each month 1,485 1,385 1,285 1,020

Direct Labor Budget

Total productive time (in minutes) required to make all jackets 26,730 24,930 23,130 18,360
Total productive time (in hours) required to make all jackets 445.5 415.5 385.5 306.0
Total non-productive time (in hours) incurred each month 222.8 207.8 192.8 153.0
Total Hours required to make all jackets 668.3 623.3 578.3 459.0

# of workers required each month (divide by Hours worked per month) 4.18 3.90 3.61 2.87

# of Teams required 2.00 2.00 2.00 1.00

Number of workers needed to hire. 6.00 6.00 6.00 3.00

Total Budgeted Direct Labor Cost (multiply # of workers x hours worked per month x Total Labor Rate) $ 12,672.00 $ 12,672.00 $ 12,672.00 $ 6,336.00

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Part 2. Prepare a Manufacturing OH Budget

June July August Sept

Units to be produced each month 1,485 1,385 1,285 1,020
Mfg OH Budget
Cost
Overhead Activity Driver
Machine Setup # of setups 6 5 4 3
Inspection # of inspections 35 30 32 34
Branding # of units 1,485 1,385 1,285 1,020

Mfg OH Cost
Machine Setup $2,000 per setup $ 12,000 $ 10,000 $ 8,000 $ 6,000
Inspection $80.00 per inspection $ 2,800 $ 2,400 $ 2,560 $ 2,720
Branding $10.00 per unit $ 14,850 $ 13,850 $ 12,850 $ 10,200
Total OH Cost $ 29,650 $ 26,250 $ 23,410 $ 18,920

Part 3. Prepare Cash Payment Schedule

Cash discount for paying for materials in month of purchase 1%

% of Materials paid for in month of purchase 60%
% of Materials paid for 1 month after purchase 40%
Accounts Payable balance on May 31 $ 100,000
Workers paid in current month
OH paid in current month, includes depreciation of $2,000 $ 2,000
June July August Sept
Materials $ 619,500 $ 577,500 $ 528,570 385,560
Direct Labor $ 12,672 $ 12,672 $ 12,672 $ 6,336
Mfg OH $ 17,770 $ 16,350 $ 15,490 12,980

Cash paid for materials $ 467,983 $ 590,835 $ 544,971 $ 440,451

Cash paid for labor $ 12,672 $ 12,672 $ 12,672 $ 6,336
Cash paid for OH $ 15,770 $ 14,350 $ 13,490 $ 10,980
$ 496,425 $ 617,857 $ 571,133 $ 457,767

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