Question

Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and 1/4 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. What is the total amount to be budgeted for direct labor for the month? $2,610 $10,440 $2,700 $41,760

Answer 1

Answer:

The correct answer is $2,610.

Explanation:

According to the scenario, computation of the given data are as follow:-

We can calculate the the direct labor cost by using following formula:-

Direct labor hour required= Estimated production × Direct labor hour

= 870 × 1÷4 =217.5 hours

Direct labor cost = Direct required labor hour × Rate of labor per hour

= 217.5 hours × $12

= $2,610

According to the analysis, $2,610 is the total amount to be budgeted for direct labor.