Question

Teton Trails manufactures backpacks for adventurers. The backpacks come in two types: Daytripper, and Excursion. Teton anticipates the following production volumes:
Daytripper: 2,000 backpacks in July, 2,200 backpacks in August
Excursion: 1,200 backpacks in July, 900 backpacks in August
Each Daytripper backpack requires 1 hour of direct labor and each Excursion backpack requires 2.5 hours of direct labor.
If the total budgeted labor for August is 5,000 hours, how much indirect labor did Teton budget?
A. 550 hours
B. 1,000 hours
C. 1,550 hours
D. 1,900 hours

Answer 1

Answer:

Indirect labor= 550 hours

Explanation:

Giving the following information:

Daytripper: 2,200 backpacks in August

Excursion: 900 backpacks in August

Each Daytripper backpack requires 1 hour of direct labor and each Excursion backpack requires 2.5 hours of direct labor.

First, we need to calculate direct labor:

Direct labor= 2,200*1 + 900*2.5= 4,450

Now, indirect labor:

Indirect labor= total labor hours - direct hours

Indirect labor= 5,000 - 4,450

Indirect labor= 550 hours