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Asked by Mackenzie Dolishny on May 16, 2024

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Smith Corporation makes and sells a single product called a Pod. Each Pod requires 1.4 direct labor-hours at $9.60 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. Smith Corporation is preparing a Direct Labor Budget for the second quarter of the year.The budgeted direct labor cost per Pod is closest to:

A) $13.44
B) $9.60
C) $7.38
D) $11.00

Direct Labor Cost

The total cost of wages paid to employees who are directly involved in the production of goods or services.

Direct Labor-Hours

The number of hours spent by workers who are directly involved in the production process.

Budgeted Cost

An estimate of the financial expenditure for a project, department, or company over a specific period.

  • Assess budgeted financial projections like the cost of goods sold, direct labor cost, and purchase requisites.
  • Examine financial planning information to gauge the efficacy of business outcomes and plan for operational activities.
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SC
Selena CharlesMay 21, 2024
Final Answer :
A
Explanation :
Direct Labor cost per Pod = Direct Labor-hours per Pod x Direct Labor cost per hour
Direct Labor-hours per Pod = 1.4
Direct Labor cost per hour = $9.60
Direct Labor cost per Pod = 1.4 x $9.60 = $13.44
Therefore, the budgeted direct labor cost per Pod is $13.44, option A is correct.

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