Asked by Taylor Giardinelli on May 20, 2024
Verified
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.In June the company has budgeted to produce 22,000 Pods. Budgeted direct labor costs incurred in June would be:
A) $470,400
B) $295,680
C) $240,000
D) $211,200
Direct Labor Budget
A financial plan that estimates the cost of direct labor required to meet production goals, taking into account wages and hours.
Budgeted Costs
Estimated expenses planned in advance for a specific period, often used as targets or benchmarks for actual performance.
- Calculate projected financial results like the cost of goods sold, expenses on direct labor, and procurement requirements.
- Assess the effectiveness of production and the use of labor in budgeting procedures.
Verified Answer
JD
John David DelfinMay 21, 2024
Final Answer :
B
Explanation :
The budgeted direct labor costs for June can be calculated as follows: 22,000 Pods * 1.4 direct labor-hours per Pod * $9.60 per direct labor-hour = $295,680.
Learning Objectives
- Calculate projected financial results like the cost of goods sold, expenses on direct labor, and procurement requirements.
- Assess the effectiveness of production and the use of labor in budgeting procedures.
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