Question

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 1.7 direct labor-hours at $9.90 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. Smith Corporation is preparing a Direct Labor Budget for the second quarter of the year. In June the company has budgeted to produce 22,300 Pods.

Budgeted direct labor costs incurred in June would be ______. (Round your intermediate calculations to 2 decimal places.)

Answer 1

$375,308

Step-by-step explanation:

In this question , we are asked to calculate the budgeted direct labor costs incurred in the month of June.

Firstly, we calculate the ratio of the direct labor cost per pod.

Direct labor cost/Pod = (1.7hours*$9.90/hour)=$16.83

Now, we proceed to calculate the budgeted direct labor cost

The budgeted direct labor cost can be calculated by multiplying the number of pods by direct labor cost/pod

From the question, we identify that the number of pods is 22,300

The budgeted direct labor cost = 16.83 * 22,300 = $375,309