Question

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 1.4 direct labor-hours at $9.60 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. Smith Corporation is preparing a Direct Labor Budget for the second quarter of the year. In June the company has budgeted to produce 22,000 Pods. Budgeted direct labor costs incurred in June would be: Multiple Choice $470,400 $295,680 $240,000 $211,200

Answer 1

Answer:

The correct option will be:  $295,680

Step-by-step explanation:

Each Pod requires 1.4 direct labor-hours at $9.60 per direct labor-hour.

So, the total direct-labor cost for each Pod will be:  $(9.60\times 1.4) dollars = 13.44$ dollars.

In June the company has budgeted to produce 22,000 Pods.

So, the direct-labor cost for all 22,000 Pods will be:   $(\ 13.44\times 22,000)= \ 295,680$

Thus, the budgeted direct labor costs incurred in June would be $295,680.