Question

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 2.4 direct labor-hours at $10.60 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 23,000 Pods. Budgeted direct labor costs incurred in June would be: (Round your intermediate calculations to 2 decimal places.)

Answer 1

$585,120

Step-by-step explanation:

The computation of Budgeted direct labor costs is shown below:-

Direct labor cost per pod = Direct labor required per pod x Direct labor rate

= 2.4 × $10.60

= $25.44

Budgeted direct labor costs incurred in June = Direct labor cost per pod × Produced pods

= $25.44 × 23,000

= $585,120

Therefore for computing the budgeted direct labor costs we simply applied the above formula.