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devlian [24]
3 years ago
7

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.4 hours of direct labor at the r

ate of $20.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 43,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 550 and 110 units, respectively. Budgeted direct labor costs for June would be:
Business
1 answer:
satela [25.4K]3 years ago
6 0

Answer:

Total direct labor hours= 102,144

Total direct labor costs= $2,042,880

Explanation:

Giving the following formula:

Standard quantity= 2.4 hours

Standard rate= $20 per hour

<u>First, we need to calculate the production required:</u>

Production= sales + desired ending inventory - beginning inventory

Production= 43,000 + 110 - 550

Production= 42,560 units

<u>Now, the direct labor budget:</u>

Total direct labor hours= 42,560*2.4= 102,144

Total direct labor costs= 102,144*20= $2,042,880

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