Asked by Aliyana Shivji on Jun 07, 2024
Verified
The estimated direct labor cost for May is closest to:
A) $786,800
B) $31,472
C) $534,000
D) $281,000
Direct Labor Cost
The compensation given to workers who are directly engaged in manufacturing products or providing services.
- Comprehend the principles and numerical methods utilized in the formulation of a direct labor budget.
Verified Answer
JV
jolly varkeyJun 14, 2024
Final Answer :
A
Explanation :
The budgeted required production for May is computed as follows: *June sales of 14,000 units × 40% = 5,600 units
** May sales of 9,400 units × 40%= 3,760 units
The estimated direct labor cost for May is computed as follows: Reference: CH08-Ref4
Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:
a.The budgeted selling price per unit is $104.Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively.All sales are on credit.
b.Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.
c.The ending finished goods inventory equals 20% of the following month's sales.
d.The ending raw materials inventory equals 30% of the following month's raw materials production needs.Each unit of finished goods requires 5 pounds of raw materials.The raw materials cost $2.00 per pound.
e.The direct labor wage rate is $23.00 per hour.Each unit of finished goods requires 2.5 direct labor-hours.
** May sales of 9,400 units × 40%= 3,760 units
The estimated direct labor cost for May is computed as follows: Reference: CH08-Ref4
Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:
a.The budgeted selling price per unit is $104.Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively.All sales are on credit.
b.Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.
c.The ending finished goods inventory equals 20% of the following month's sales.
d.The ending raw materials inventory equals 30% of the following month's raw materials production needs.Each unit of finished goods requires 5 pounds of raw materials.The raw materials cost $2.00 per pound.
e.The direct labor wage rate is $23.00 per hour.Each unit of finished goods requires 2.5 direct labor-hours.
Learning Objectives
- Comprehend the principles and numerical methods utilized in the formulation of a direct labor budget.
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