Question

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.7 hours of direct labor at the rate of $23.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 46,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 580 and 140 units, respectively. Budgeted direct labor costs for June would be:

Answer 1

$ 2,829,276

Step-by-step explanation:

The budgeted direct labour cost is going to be based on the budgeted production units.

Production budget = sales budget + closing inventory -opening inventory

Production budget = 46,000 - 140 + 580 = 45,560

Labour budget = Production budget× hours per unit

= 45,560× 2.7 hrs × $23

= $ 2,829,276