Angora Wraps of Pendleton, Oregon, makes fine sweaters out of pure angora wool.
ID: 2556355 • Letter: A
Question
Angora Wraps of Pendleton, Oregon, makes fine sweaters out of pure angora wool. The business is seasonal, with the largest demand during the fall, the winter, and Christmas holidays. The company must increase production each summer to meet estimated demand.
The company has been analyzing its costs to determine which costs are fixed and variable for planning purposes. Below are data for the company’s activity and direct labor costs over the last year.
The number of workdays varies from month to month due to the number of weekdays, holidays, and days of vacation in the month. The paid days include paid vacations (in July) and paid holidays (in November and December). The number of units produced in a month varies depending on demand and the number of workdays in the month.
The company has eight workers who are classified as direct labor.
QUESTION: Please provide the direct labor cost, units produced, and number of days paid for January, February, March, April, May, June, July, August, September, October, November and December.
Thousands of UnitsProduced Number of
Paid
Days Direct Labor
Cost Month January 96 21 $ 15,037 February 83 21 $ 13,862 March 82 22 $ 16,024 April 87 23 $ 15,878 May 92 23 $ 16,608 June 109 22 $ 16,170 July 59 20 $ 14,564 August 143 22 $ 15,002 September 145 23 $ 16,316 October 139 24 $ 16,316 November 93 19 $ 13,812 December 63 22 $ 14,949
Explanation / Answer
The Question by itself reveals the answer
However, the amount of Each
The Solution can however be solved as per the requirement of ABC Costing
By Setting Parameters of labour Cost as days or as units produced
Direct labour cost can be ascertained as cost for each unit OR
Cost for each day for Particular month
Direct labour cost can be ascertained as cost for each unit
****** the calculation for labour cost in each month on the basis of units produced
###### The calculation for labour cost per month per labour on the basis of units produced
Cost for each day for Particular month
****** the calculation for labour cost in each month on the basis of number of days
###### The calculation for labour cost per month per labour on the basis of number of days
Months Units Produced Paid days Labour Cost January 96,000 21 15,037 February 83,000 21 13,862 March 82,000 22 16,024 April 87,000 23 15,878 May 92,000 23 16,608 June 109,000 22 16,170 July 59,000 20 14,564 August 143,000 22 15,002 September 145,000 23 16,316 October 139,000 24 16,316 November 93,000 19 13,812 December 63,000 22 13,812