Asked by Nicole Hoskins on Jun 06, 2024
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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:
A) $1,984,325
B) $1,974,175
C) $1,979,250
D) $564,050
Direct Labor Budget
A financial plan that estimates the cost of direct labor needed to meet production goals, part of the overall budgeting process.
Direct Labor-Hour
A measure of the labor time directly involved in the manufacturing process or service delivery, often used in costing and budgeting.
Budgeted Production
The planned level of output a company aims to achieve in a specific period, used for preparing budgets and setting production goals.
- Evaluate the budgeted expense of direct labor for every unit of product.
- Understand the components and preparation of a Direct Labor Budget.
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Learning Objectives
- Evaluate the budgeted expense of direct labor for every unit of product.
- Understand the components and preparation of a Direct Labor Budget.
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