Preparing a Direct Labor Budget Patrick Inc. makes industrial solvents. Planned production in units for the first 3 months of the coming year is: January 43,800 February 41,000 March 50,250 Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $18 per hour. Required: Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer.

Question

Niko Griffith

Business

10 February, 11:03

Preparing a Direct Labor Budget Patrick Inc. makes industrial solvents. Planned production in units for the first 3 months of the coming year is: January 43,800 February 41,000 March 50,250 Each drum of industrial solvent takes 0.3 direct labor hours. The average wage is $18 per hour. Required: Prepare a direct labor budget for the months of January, February, and March, as well as the total for the first quarter. Do not include a multiplication symbol as part of your answer.

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Answers (1)

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Wilson Barrett · Answer 1

January:

Budget labor cost = $236,520

February:

Budget labor cost = $221,400

March:

Budget labor cost = $271,350

Explanation:

Giving the following information:

Planned production in units for the first 3 months of the coming year is:

January = 43,800

February = 41,000

March = 50,250

Each drum of the industrial solvent takes 0.3 direct labor hours. The average wage is $18 per hour.

Budget labor cost = number of units*0.3 direct labor hours * average wage

January:

Budget labor cost = 43,800*0.3*18 = $236,520

February:

Budget labor cost = 41,000*0.3*18 = $221,400

March:

Budget labor cost = 50,250*0.3*18 = $271,350