Reference: 07-10
The LFM Company makes and sells a single product, Product T. Each unit of Product T requires 1.3 hours of labour at a labour rate of $9.10 per hour. LFM Company needs to prepare a Direct Labour Budget for the second quarter of next year.
-The company has budgeted to produce 25,000 units of Product T in June. goods inventories on June 1 and June 30 were budgeted at 500 and 700 units, respectively. Budgeted direct labour costs incurred in June would be:
A)$295,750.
B)$304,031.
C)$227,500.
D)$293,384.

Question

Quizplus · Accepted Answer

To calculate the budgeted direct labour costs for June, first determine the total labour hours needed: 25,000 units x 1.3 hours/unit = 32,500 hours. Then, multiply the total hours by the labour rate: 32,500 hours x $9.10/hour = $295,750.

Reference: 07-10 The LFM Company Makes and Sells a Single Product, Product