Question

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.5 hours of direct labor at the rate of $14.50 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

The company plans to sell 39,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively. Budgeted direct labor costs for June would be:

Answer 1

Answer: Direct Labour Costs is 1974175 $

Working Note:

Each Unit Require 3.5 Hours

Direct Labour Rate Per Hour is 14.5 $

Cost of Dierect Labour per unit is,( 3.5 Hour* 14.5 $ Rate Per Hour) =50.75$

Number units Production In Month Of June

Plans to Sell Unit 39000

Add: Finished Goods Inventory at the end 100

Less: Finished Goods Inventory at the Beggining (200)

Total Production Units 38900

so Budgeted Direct Labour Costs = Total Production Units* cost Of Labour Hour Per unit

=38900* 50.75 $= 1974175 $