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5 November, 16:24

asadena Candle Inc. budgeted production of 785,000 candles for January. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs $18 per hour, determine the direct labor cost budget for January.

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  1. 5 November, 16:31
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    Direct labor cost budget is 1,413,000

    Explanation:

    To get the direct labor cost budget for January first we have to get the direct cost per unit.

    Direct cost per unit = direct labor hourly rate * the number of direct labor hours required to complete one unit.

    Direct labor hourly rate = $18

    The number of direct labor hours required to complete one unit = If we spend 6 minutes for each candle and 1 hour is 60 minutes. So, we use 1/10 of an hour to get 1 candle.

    Direct cost per unit = $18 * 1/10=$1.8

    The production for January is 785,000 candles.

    Then, direct labor cost budget for January is the production multiplied by the direct cost per unit.

    Direct labor cost budget=785,000*$1.8=1,413,000
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Home » Business » asadena Candle Inc. budgeted production of 785,000 candles for January. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs $18 per hour, determine the direct labor cost budget for January.
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