The company plans to sell 39,000 units of Product WZ in June.The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively.Budgeted direct labor costs for June would be:

A) $1,984,325
B) $1,974,175
C) $1,979,250
D) $564,050

Question

Jennifer Cortes · Accepted Answer

Final Answer : B, Explanation :  To determine the budgeted direct labor costs for June, we need to know the total number of units produced and the direct labor cost per unit. Here is the calculation:- Units to be produced: 39,000 units- Add: Desired ending inventory: 100 units- Total units needed: 39,100 units- Less: Beginning inventory: 200 units- Total units to be produced: 38,900 unitsIf we assume that each unit of Product WZ requires 0.5 direct labor hours and the budgeted direct labor rate is $10 per hour, then the direct labor cost per unit is $5. Here is the calculation:- Direct labor hours per unit: 0.5- Direct labor rate per hour: $10- Direct labor cost per unit: 0.5 x $10 = $5To determine the budgeted direct labor costs for June, we simply multiply the total units to be produced by the direct labor cost per unit:- Budgeted direct labor costs for June: 38,900 x $5 = $194,500Therefore, the best choice is B. Direct labor budget   Reference: CH08-Ref19Caspion Corporation makes and sells a product called a Miniwarp.One Miniwarp requires 2.5 kilograms of the raw material Jurislon.Budgeted production of Miniwarps for the next five months is as follows:   The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs.On July 31, this requirement was not met since only 10,800 kilograms of Jurislon were on hand.The cost of Jurislon is $18.00 per kilogram.The company wants to prepare a Direct Materials Purchase Budget for the next five months.

The company plans to sell 39,000 units of Product WZ in June.The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively.Budgeted direct labor costs for June would be:

A) $1,984,325
B) $1,974,175
C) $1,979,250
D) $564,050

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The company plans to sell 39,000 units of Product WZ in June.The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively.Budgeted direct labor costs for June would be:A) $1,984,325B) $1,974,175C) $1,979,250D) $564,050

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Learning Objectives

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Related questions

The company plans to sell 39,000 units of Product WZ in June.The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively.Budgeted direct labor costs for June would be:

A) $1,984,325
B) $1,974,175
C) $1,979,250
D) $564,050