Question

Based on the following information, which of these statements is false? Time Period 1st Quarter 2nd Quarter 3rd QuarterBeginning finished goods (units) 5,000 4,000 12,000Projected sales units 50,000 40,000 120,000Desired ending finished goods (units) 4,000 12,000 15,000Direct labor completes 2 units per hour at $8 per hourWhich of the following statements is false?:1. Direct labor hours for the 3rd quarter will be 66,000.2. Direct labor cost for the 4th quarter cannot be determined.3. 150,000 sales units are projected for the 4th quarter.4. Direct labor cost for the 2nd quarter will be $192,000.

Answer 1

Answer: 4. direct labour costs for the second quarter will be $192000

Explanation:

Finished Goods opening balance (quarter 2) = 4000

Projected sales  = 40000

total units = 4000 + 40000 = 44000

direct labour produces 2 units per hour and an hour cost $8

direct labour cost = 44000/2 = 22000 hours = 22000 x 8 =176000

direct labour costs for quarter 2 = $ 176000. NOT $192000