Question

Zhang Industries budgets production of 270 units in June and 280 units in July. Each unit requires 1.5 hours of direct labor. The direct labor rate if $13.40 per hour. The indirect labor rate is $20.40 per hour. Compute the budgeted direct labor cost for July.

A. $8,262.
B. $5,427.
C. $8,568.
D. $5,628.
E. $14,196

Answer 1

Budgeted cost for July will be equal to $5628

So option (d) will be the correct option

Explanation :

We have given Budgets production for July = 280 units

Each unit requires 1.5 hours of direct labor

Total Direct Labor Required = 280×1.5 = 420 hours

The direct labor rate = $13.40 per hour

Therefore, the Budgeted direct labor cost for July = 420 Hours × $ 13.40 = $ 5628.

So the budgeted cost for July will be equal to $5628

So option (D) will be the correct option