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Sales
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DirectMaterials
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Budget
Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
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Budgets
Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
Materials
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Factory
FactoryOverhead
Overhead
Cost
CostBudget
Budget
Income
Budgets
Statement
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Budgets
Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
Materials
Purchases
PurchasesBudget
Budget
Cost
Costof
of
Production Direct
DirectLabor
Labor
Production
Cost
CostBudget
Budget
Factory
FactoryOverhead
Overhead
Cost
CostBudget
Budget
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Statement
Relation
Budgets
Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
Materials
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PurchasesBudget
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Cost
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Cost
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Selling
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Overhead
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Expenses
Budget
Budget
Direct
Labor
Budget
Direct Labor Budget
• Provides an estimate of the cost of the direct
labor that must be used in the next year.
• To prepare the direct labor budget, a company
would use its production budget
• The direct labor budget enables the personnel
department (HRD) to plan for hiring and
repositioning of employees
Direct Labor Budget
• The use of direct labor budget are :
– basis to prepare the CoGM and CoGS
– basis to to prepare the cash budget
• A good direct labor budget helps the firm
to avoid emergency hiring, prevent labor
shortages, reduce or eliminate the need
to lay off workers, etc.
11
Factors that must be considered while prepare the
Direct Labor Budget
Units to be produced
x Variable costs per unit
= Total variable
overhead
+ Budgeted fixed
overhead
= Total budgeted overhead
PT.XYZ
Budget BOP
Tahun
Keterangan TW 1 TW 2 TW 3 TW 4
Unit Produced
FOH Variable
1
2
3
FOH Fixed
1
2
3
TOTAL FOH
Exersice
• HAMSTA Corp is preparing its manufacturing overhead budget for
2009. Relevant data consist of the following
– Units to be produced (by quarters) : 10,000 , 12,000 , 14,000 ,
16,000
– Direct Labor Time is 1.5 hours per unit
– Variable Overhead cost per direct labor hour
• Indirect material $0.70
• Indirect labor $1.2
• Maintenance machine $0.50
– Fixed overhead costs per quarter :
• Supervisory salaries $35,000
• Depreciation $16,000
• Maintenance plant $12,000