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.The finished goods inventories on June 1 and June 30 were budgeted at 500 and 700 units,respectively.What would be the budgeted direct labour costs incurred in June?
A) $227,500.
B) $293,384.
C) $295,750.
D) $304,031.

Question

Quizplus · Accepted Answer

The budgeted direct labour costs for June can be calculated by first determining the total hours of labour needed for production and then multiplying by the hourly labour rate. The company plans to produce 25,000 units, each requiring 1.3 hours of labour at a rate of $9.10 per hour. Therefore, the total labour hours required are 25,000 units * 1.3 hours/unit = 32,500 hours. The total direct labour cost is then 32,500 hours * $9.10/hour = $295,750.

The LFM Company Makes and Sells a Single Product: Product