Asked by Destini Crawford on Apr 29, 2024
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LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.5 hours of direct labor at the rate of $14.50 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.The budgeted direct labor cost per unit of Product WZ would be:
A) $50.75
B) $14.50
C) $4.14
D) $18.00
Direct Labor Budget
A financial plan that forecasts the costs associated with the labor directly involved in the production of goods or services.
Direct Labor-Hour
A metric indicating the total hours worked by employees directly involved in the production process, often used for costing purposes.
Labor Rate
The amount paid to an employee per unit of time, usually per hour or year.
- Calculate the projected direct labor expense per product unit.
Verified Answer
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Akhil DatlaMay 03, 2024
Final Answer :
A
Explanation :
In order to determine the budgeted direct labor cost per unit of Product WZ, we need to calculate the total direct labor cost first.
Total direct labor cost = Direct labor hours per unit x Direct labor rate per hour
Direct labor hours per unit = 3.5 hours
Direct labor rate per hour = $14.50
Total direct labor cost = 3.5 x $14.50 = $50.75
Therefore, the budgeted direct labor cost per unit of Product WZ is $50.75.
Total direct labor cost = Direct labor hours per unit x Direct labor rate per hour
Direct labor hours per unit = 3.5 hours
Direct labor rate per hour = $14.50
Total direct labor cost = 3.5 x $14.50 = $50.75
Therefore, the budgeted direct labor cost per unit of Product WZ is $50.75.
Learning Objectives
- Calculate the projected direct labor expense per product unit.