Question

lbc corporation makes and sells a product called product wz. each unit of product wz requires 3.5 hours of direct labor at the rate of $14.50 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 200 and 100 units, respectively. budgeted direct labor costs for june would be:

Answer 1

To calculate the budgeted direct labor costs for LBC Corporation, we need to account for the units to be produced and the direct labor hours and rate per unit. For June, the budgeted direct labor costs are $1,984,325, based on producing 39,100 units at 3.5 hours per unit and a labor rate of $14.50 per hour.

Step-by-step explanation:

The question involves calculating the direct labor budget for LBC Corporation for the month of June, given the planned sales units and the direct labor hours and rate for Product WZ. To compute the budgeted direct labor costs, we must consider the number of units to be produced, which is influenced by both planned sales and changes in finished goods inventory. The company plans to sell 39,000 units and there is an expected decrease in inventory from 200 to 100 units; therefore, the company must produce 39,100 units in June (39,000 units to be sold plus 100 units to maintain ending inventory of June). Each unit of Product WZ requires 3.5 hours of direct labor at a rate of $14.50 per hour.

First, we calculate the total hours required for production:
39,100 units * 3.5 hours/unit = 136,850 hours.

Next, we use the total hours to determine the labor costs:
136,850 hours * $14.50/hour = $1,984,325.

Therefore, the budgeted direct labor costs for June would be $1,984,325.