Pacer, Inc., is preparing its direct labor budget for 2005 from the following production budget based on a calendar year.

Pacer, Inc., is preparing its direct labor budget for 2005 from the following production budget based on a calendar year.

Quarter Units Quarter Units

1 20,000 3 35,000

2 25,000 4 30,000

Each unit requires 1.2 hours of direct labor.

Instructions

Prepare a direct labor budget for 2005. Wage rates are expected to be $15 for the first 2 quarters and $16 for quarters 3 and 4.