During 2005 , a new contract was signed with the union . As part of that agreement , no worker can work in more than one department , and no single worker can work over 2,000 hours during the year . This means that for every 2,000 hours of labor that is required for production in each department , one hourly employee is needed . For example , if a department needs 10,150 labor hours during the year , six employees will be needed ( 10,150 total hours / 2,000 per employee = 5.075 which needs to be rounded to 6 employees ).
The standard direct labor rate will increase $ 0.25 per hour over the 2005 rate .
Additional information regarding employee benefits is included in the section on manufacturing overhead .
2006 OVERHEAD BUDGET INFORMATION
The following information is available regarding the actual overhead costs incurred for 2005 :
2006 SALES DEPARTMENT INFORMATION
The sales department consists of 10 representatives who report directly to the president . Each individual is on a base salary plus a commission , and the sales reps also submit meal and entertainment expenses for reimbursement . ( In 2005 , the meal and entertainment expenses were limited to $ 50 per week per sales representative based upon a 52 week year .)
The following information is available regarding the actual selling costs incurred for 2005 :
No change 2006 ADMINISTRATIVE BUDGET INFORMATION