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

Each unit of product requires 3.5 hours of direct labor at the rate of $14.50 per hour. Thus, the budgeted direct labor cost per unit is:
3.5 * 14.50 = $50.75.
Budgeted direct labor cost for June will be determined using the formula:
Unit produced = ending inventory + units sold - Beginning inventory
 = 100 + 39,000 - 200 = 38,900 units
Labor cost for June = 38,900 * 50.75 = $1,974,175.00.