Maple Inc. produces wooden boxes. The production budget for the next four months

Question

Maple Inc. produces wooden boxes. The production budget for the next four months is: July 15,600 units, August 17,300, September 17,800. Each box requires three skill levels: 1.2 hours of unskilled labor (paid $10 per hour), 1.8 hours of semi-skilled labor (paid $13) and 1.9 hours of skilled labor (paid $14 per hour). Required: Prepare a labor budget for the three months July September. Provide the labor requirements according to skill level in hours and in labor cost as well as in total Provide the budget monthly as well as a total for the quarter September Production Unskilled Hours Semiskilled Total Labor Hours Unskilled Cost Semiskilled Total Labor Cost

Explanation / Answer

Calculations Particulars July August September Total A Production          15,600          17,300           17,800          50,700 B Hours required of Unskilled labor 1.2 1.2 1.2 1.2 C Hours required of Semi-skilled labor 1.8 1.8 1.8 1.8 D Hours required of skilled labor 1.9 1.9 1.9 1.9 E = A x B Total Hours of Unskilled labor          18,720          20,760           21,360          60,840 F = A x C Total Hours of Semi-skilled labor          28,080          31,140           32,040          91,260 G = A x D Total Hours of skilled labor          29,640          32,870           33,820          96,330 H Cost per hour of Unskilled labor 10 10 10 10 I Cost per hour of Semi-skilled labor 13 13 13 13 J Cost per hour of Skilled labor 14 14 14 14 K = E x H Labor cost for Unskilled labor       187,200       207,600        213,600       608,400 L = F x I Labor cost for Semi-skilled labor       365,040       404,820        416,520    1,186,380 M = G x J Labor cost for Skilled labor       414,960       460,180        473,480    1,348,620 N = K+L+M Total labor cost       967,200    1,072,600     1,103,600    3,143,400

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