Question

Pasadena candle inc. budgeted production of of 785,000 candles for the year. 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 the year. wax is required to produce a candle. assume 487,125 pounds of material will be purchased during the year. if candle wax costs $1.24 per pound, determine the direct materials purchases for the year.

Answer 1

The direct labor cost budget for Pasadena Candle Inc. is $1,413,000 for the year, calculated from the 78,500 hours needed at $18 per hour. The direct material purchases for the wax needed are $604,035, based on 487,125 pounds of wax at $1.24 per pound.

Step-by-step explanation:

To calculate the direct labor cost budget for Pasadena Candle Inc., we must first find the total molding time required for production. With each candle taking six minutes to mold and the company planning to produce 785,000 candles, the total molding time will be:

• 785,000 candles × 6 minutes per candle = 4,710,000 molding minutes

Next, we convert molding minutes into hours since the labor cost is provided in dollars per hour.

• 4,710,000 minutes ÷ 60 minutes per hour = 78,500 molding hours

Then we calculate the total labor cost by multiplying the hours required by the cost per hour:

• 78,500 hours × $18 per hour = $1,413,000

The direct labor cost budget for molding the candles for the entire year will be $1,413,000.

For the direct material purchases, we must calculate the cost of the wax needed. With 487,125 pounds of wax required and a cost of $1.24 per pound, the calculation is:

• 487,125 pounds × $1.24 per pound = $604,035

The total direct material purchases for the wax needed to produce the candles will be $604,035.

Answer 2

In order to calculate the cost, 785000, the number of candles per year is multiplied times six, for the number of minutes it takes to mold them. That number is then divided by 60 because there are 60 minutes in an hour. Then that number is multiplied by 18 because that is the cost of molding per hour. Doing this gives the labor cost for a year, $1,413,000. To calculate materials cost, multiply 487125, the cost of wax needed by 1.25, the cost per pound. The cost of materials for the year is 608,906.25.