Question

Sheridan Company is planning to sell 1000 buckets and produce 580 buckets during March. Each bucket requires 600 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 600 grams and employees of the company are paid $14 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Sheridan has 1100 kilos of plastic in beginning inventory and wants to have 600 kilos in ending inventory. How much is the total amount of budgeted direct labor for March

Answer 1

Budgeted labour cost = $12,180

Step-by-step explanation:

Budgeted labour cost for a forth accounting period is the product of the budgeted labour hours and the standard rate per hour.

The standard rate per hour is the amount paid to workers for each hour worked.

The budgeted labour hours is the product of budgeted production units and the standard hours per unit

Budgeted labour cost = 580× 1.5 × $14=$12,180

Budgeted labour cost = $12,180