Production estimates for July are as follows: $\begin{array}{ll}
650 & \text { Estimated inventory (units), July 1 } \
1,050 & \text { Desired inventory (urits), July 31 } \
7,600 & \text { Expected sales volume (units), July }
\end{array}$ For each unit produced 3 hours of direct labor is required. The labor rate per hour is $12. The number of direct labor hours required for July production is:
A) 24,000.
B) 21,600.
C) 22,800.
D) 25,950.

Question

Production estimates for July are as follows: $\begin{array}{ll}
650 & \text { Estimated inventory (units), July 1 } \
1,050 & \text { Desired inventory (urits), July 31 } \
7,600 & \text { Expected sales volume (units), July }
\end{array}$  For each unit produced 3 hours of direct labor is required. The labor rate per hour is $12. The number of direct labor hours required for July production is:
A) 24,000.
B) 21,600.
C) 22,800.
D) 25,950.

Quizplus · Accepted Answer

The number of units to be produced in July is 7,600 + 1,050 - 650 = 8,000 units. Each unit requires 3 hours of direct labor, so the total number of direct labor hours required is 8,000 units * 3 hours/unit = 24,000 hours.

Production Estimates for July Are as Follows For Each Unit Produced 3 Hours of Direct Labor Is