Holt Products manufactures desktop computers. Management has determined that each computer has a standard labor cost of $75.00 when 5 hours of labor at a cost of $15.00 per hour are used. The static budget for the month of April showed an estimated production of 4,200 computers. During April, 4,500 computers were actually produced. The actual direct labor cost for each computer was $85.80 when 5.5 hours of labor at a cost of $15.60 per hour was used. What should be the total direct labor cost according to Holt's flexible budget for April?
A) $360,360
B) $315,000
C) $337,500
D) $386,100

Question

Quizplus · Accepted Answer

The flexible budget for direct labor cost is calculated based on the actual production level at the standard cost. For 4,500 computers, at a standard labor cost of $75.00 each (5 hours at $15.00 per hour), the total is 4,500 computers * $75.00 = $337,500.

Holt Products Manufactures Desktop Computers