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Direct Labor Budget

Factory Overhead Budget


Budgets Relation

Sales
Sales
Budget
Budget
Income
Budgets
Statement
Relation
Budgets

Sales
Sales Production Budget
Budget
Budget

Expected units of sales


+ Desired units in ending inventory
- Estimated units in beginning inventory
Total units to be produced
Income
Budgets
Statement
Relation
Budgets

Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
Materials
Purchases
PurchasesBudget
Budget

Materials needed for production


+ Desired ending materials inventory
- Estimated beginning materials inventory
Direct materials to be purchased

Materials needed for production = unit to produced x standard usage rate


Income
Budgets
Statement
Relation
Budgets

Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
Materials
Purchases
PurchasesBudget
Budget

Direct
DirectLabor
Labor
Cost
CostBudget
Budget
Income
Budgets
Statement
Relation
Budgets

Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
Materials
Purchases
PurchasesBudget
Budget

Direct
DirectLabor
Labor
Cost
CostBudget
Budget

Factory
FactoryOverhead
Overhead
Cost
CostBudget
Budget
Income
Budgets
Statement
Relation
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
Income
Budgets
Statement
Relation
Budgets

Sales
Sales Production Budget
Budget
Budget Direct
DirectMaterials
Materials
Purchases
PurchasesBudget
Budget
Cost
CostofofGoods
Goods
Sold Direct
DirectLabor
SoldBudget
Budget Labor
Cost
CostBudget
Budget

Selling
Selling&& Factory
FactoryOverhead
Overhead
Administrative
Administrative Cost
CostBudget
Budget
Expenses
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

• Unit to be produced budget


• Time standard (historical/previous experience
or time motion study)
• Wage-rate standard (the regulation or
negotiation between firms and employee)
• Some of wage-rate system :
– According time (eq. Rp. 20.000 per hour)
– According result/output (eq.Rp. 2000 per unit)
– According incentive
Direct Labor Budget

Direct labor hours per unit


x Labor rate per hour
= Direct labor cost per
x Units to be produced
unit
= Total direct labor cost
• Standar waktu PT.Charisma
– 1 unit X membutuhkan 0,3 jam
– 1 unit Y membutuhkan 0,2 jam
• Tahapan Produksi
– Dept I 50% dari keseluruhan jam kerja langsung
– Dept II 30% dari keseluruhan jam kerja langsung
– Dept III 20% dari keseluruhan jam kerja langsung

lihat hal 150-151


h. 152-153
PT.Charisma
Direct Labor Budget
Januari 1985
Ket Unit Time Total Hour Wage-rate Total Paying
Produced standard (per hour) (Rp)
(hour)
Januari
Product X 120,000 0.3 36,000 400 14,400,000

Product Y 90,000 0.2 18,000 400 7,200,000


Total - - 54,000 - 21,600,000
Dept I 27,000 400 10,800,000
Dept II 16,200 400 6,480,000
Dept III 10,800 400 4,320,000
Total 54,000 - 21,600,000
Exersice
JMBL is preparing its direct labor budget for 2009
from the following production budget
Quarter 1 : 20,000 unit Quarter 3 : 35,000 unit
Quarter 2 : 25,000 unit Quarter 4 : 30,000 unit

Each unit require 1.6 hours of direct labor for Q1 and Q2 ,


and 1,5 hours for Q3 and Q4

Prepare a direct labor budget for 2009 while wages


rates to be $15 for the first 2 quarters and $16 for quarter
3 and 4 (per hour)
Factory Overhead Budget
• A factory overhead budget often includes all
production costs other than direct materials and
direct labor

• Karakteristik BOP yaitu jumlahnya tidak


proporsional dengan volume produksi,
sulit ditelusur dan diidentifikasi langsung
ke produk atau pesanan, dan jumlahnya
tidak material.
Factory Overhead Costs:
Examples
Fixed
Variable Overhead
Overhead
 Factory
 Factory managers’
managers’
salaries
salaries
 Energy
 Energy costs
costs  Plant
 Plant and
and equipment
equipment
 Indirect
 Indirect materials
materials depreciation
depreciation
 Indirect
 Indirect labor
labor  Plant
 Plant security
security guards
guards
 Equipment
 Equipment repair
repair  Insurance
 Insurance andand property
property
and
and maintenance
maintenance taxes
taxes for
for factory
factory
building
building and
and equipment
equipment
Factory Overhead 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

Total FOH Variable

FOH Fixed
1
2
3

Total FOH Fixed

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