Question

EA7.

LO 7.2Each unit requires direct labor of 2.2 hours. The labor rate is $11.50 per hour and next year’s direct labor budget totals $834,900. How many units are included in the production budget for next year?

Answer 1

33,000

Step-by-step explanation:

The number of units included in the production budget is given by dividing the budgeted value by the cost per unit.

The cost per unit is:

`C = 2.2*\$11.50\\C = \$25.30`

The number of budgeted units is:

`n=(\$834,900)/(\$25,30)\\n=33,000`

33,000 units are included in the production budget for next year