Question

Secret Prizes Inc. is planning to sell 200 buckets and produce 190 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500 grams and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Secret Prizes has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory. How much is the total amount of budgeted direct labor for March? $1,425 $3,000 $2,850 $1,500

Answer 1

Answer:

Budgeted direct labour hours

= 0.5 hour x 200 buckets

= 100 hours

Budgeted amount of direct labour

= 100 hours x $15

=  $1,500

Explanation:

There is need to calculate direct labour hour, which is 0.5 hour multiplied by number of buckets budgeted. then, we will determine the budgeted amount of direct labour, which is budgeted direct labour hours multiplied by hourly rate.