Question 1

Preparing a Direct Labor Budget

Patrick Inc. makes industrial solvents. Planned production in units for the first three months of the coming year is:

January	40,000
February	50,000
March	60,000

Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $17.10 per hour.

Required:

Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer.

Patrick Inc.
Direct Labor Budget
For the Coming First Quarter
Direct Labor Budget:	January	February	March	Total
Units to be produced
Direct labor hrs per unit
Total direct labor hrs
Wage rate	$	$	$	$
Direct labor cost	$	$	$	$

Question 2

Preparing an Overhead Budget

Patrick Inc. makes industrial solvents. Budgeted direct labor hours for the first three months of the coming year are:

January	13,140
February	12,300
March	15,075

The variable overhead rate is $0.80 per direct labor hour. Fixed overhead is budgeted at $2,990 per month.

Required:

Prepare an overhead budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer. Round total variable overhead and total overhead to the nearest dollar.

Patrick Inc.
Overhead Budget
For the Coming First Quarter
Overhead:	January	February	March	Total
Total direct labor hrs
Variable overhead rate	$	$	$	$
Total variable overhead	$	$	$	$
Add: Fixed overhead
Total overhead	$	$	$	$