Question

a company budgeted to produce 60,000 units in october. the finished goods inventory on october 1 and october 31 were budgeted at 2,000 and 10,000 units, respectively. each unit requires 1.5 hours of labour and the company pays an hourly rate of $14 per hour. calculate the budgeted direct labour costs incurred in october

Answer 1

To calculate the budgeted direct labor costs incurred in October, multiply the total number of labor hours required by the hourly rate. Each unit requires 1.5 hours of labor, so the total labor hours required would be 90,000 hours. The hourly rate is $14 per hour, so the budgeted direct labor costs would be $1,260,000.

Step-by-step explanation:

To calculate the budgeted direct labor costs incurred in October, we need to find the total number of labor hours required to produce 60,000 units and multiply it by the hourly rate. Each unit requires 1.5 hours of labor, so the total labor hours required would be 60,000 units multiplied by 1.5 hours, which is 90,000 hours. The hourly rate is $14 per hour, so the budgeted direct labor costs would be 90,000 hours multiplied by $14, which equals $1,260,000.