Question

LHU Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.5

hours of direct labor at the rate of $15.00 per direct labor-hour. Management would like you to prepare a
Direct Labor Budget for June.The company plans to sell 38,000 units of Product WZ in June. The finished goods inventories on June
1 and June 30 are budgeted to be 600 and 100 units, respectively. Budgeted direct labor costs for June
would be:
A. $562,500
B. $1,425,000
C. $1,406,250
D. $1,443,750

Answer 1

The budgeted direct labor costs for June would be $1,425,000.

Step-by-step explanation:

To calculate the budgeted direct labor costs for June, we need to multiply the number of units of Product WZ produced by the direct labor hours required per unit and the rate per direct labor-hour. In this case, LHU Corporation plans to sell 38,000 units of Product WZ in June, and each unit requires 2.5 hours of direct labor at a rate of $15.00 per direct labor-hour.

Therefore, the budgeted direct labor costs for June would be: $15.00 x 2.5 hours x 38,000 units = $1,425,000.