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LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires...

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.6 hours of direct labor at the rate of $22.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

The company plans to sell 45,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 570 and 130 units, respectively. Budgeted direct labor costs for June would be:

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Answer #1
Direct Labour Budget
Budgeted sales            45,000
Add: Desired ending inventory                  130
Less: Estimated beginning inventory                  570
Number of units to be produced            44,560
Direct labour hour required per unit 2.6
Total direct labour hours required (44,560*2.60)          115,856
wage rate $                22
Budgeted direct labor cost (115,856*$22) $ 2,548,832

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