Question

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.2 hours of direct labor at the rate of $18.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.The company plans to sell 38,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 600 and 100 units, respectively. Budgeted direct labor costs for June would be:

Answer 1

Answer:

$1,485,000

Explanation:

Given that,

Ending Inventory = 100 units

Sales = 38,000 units

Beginning Inventory  = 600 units

Direct labor hours required per unit  = 2.2 DLH

Rate per direct labor-hour = $18

Total Units produced in June:

= Ending Inventory + Sales - Beginning Inventory

= 100 units + 38,000 units - 600 units

= 37,500 units

Budgeted direct labor costs for June would be:

= Total Units produced in June × Direct labor hours required per unit × Rate per direct labor-hour

= 37,500 units × 2.2 × $18

= $1,485,000