Dominion Industries manufactures three models of a product in a single plant with two departments: Cutting and Assembly. The company has estimated costs for each of the three product models: the Economy, the Standard, and the Premium models. The company is currently analyzing direct labor hour requirements for the upcoming year.
Cutting Assembly
Estimated hours per unit:
Economy ........................................................................ 1.2.......................................2.8
Standard ........................................................................ 1.3.......................................2.2
Premium ......................................................................... 1.4.......................................2.1
Direct labor hour rate..............................................$10......................................$12
Budgeted unit production for each of the products is as follows:
Number of units to be produced
Product model:
Economy ......................................................... 510
Standard ......................................................... 700
Premium .......................................................... 860
Requirement
Prepare a direct labor budget for the upcoming year that shows the budgeted direct labor costs for each department and for the company as a whole.