Response to the following problem:
The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Units to be produced 11,600 10,600 12,600 13,600
Each unit requires 0.20 direct labor-hours and direct laborers are paid $15.00 per hour.
In addition, the variable manufacturing overhead rate is $1.75 per direct labor-hour. The fixed manufacturing overhead is $96,000 per quarter.
The only noncash element of manufacturing overhead is depreciation, which is $36,000 per quarter.