LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.0 hours of direct labor at the rate of $16.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 39,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 610 and 110 units, respectively. Budgeted direct labor costs for June would be:

Question

Amelie

Business

25 June, 14:19

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.0 hours of direct labor at the rate of $16.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 39,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 610 and 110 units, respectively. Budgeted direct labor costs for June would be:

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Carina Marshall · Answer 1

Instructions are below.

Explanation:

Giving the following information:

Each unit of Product WZ requires 2.0 hours of direct labor at the rate of $16.00 per direct labor-hour.

The company plans to sell 39,000 units of Product WZ in June.

Beginning inventory = 610

Ending inventory = 110

First, we need to calculate the production for June:

Production = sales + desired ending inventory - beginning inventory

Production = 39,000 + 110 - 610

Production = 38,500 units

Direct labor budget:

Total direct labor hours = 38,500*2 = 77,000 hours

Total direct labor cost = 77,000*16 = $1,232,000