Question

Coronado Industries is preparing its direct labor budget for May. Projections for the month are that 23400 units are to be produced and that direct labor time is three hours per unit. If the labor cost per hour is $12, what is the total budgeted direct labor cost for May

Answer 1

$842,400

Step-by-step explanation:

Cost of labor which is incurred to produce a specific product is known as direct labor cost of that product. It is charged directly to the product cost as this cost is purely incurred in the production that specific product.

As per given Data

Projected units = 23,400

Hours per unit = 3 hours

Labor cost per hour = $12 per hour

Budgeted Direct labor hour = Projected units x Hours per unit x Labor cost per hour

Budgeted Direct labor hour = 23,400 units x 3 hours x $12 per hour

Budgeted Direct labor hour = $842,400

Answer 2

$842,400

Step-by-step explanation:

The direct labor cost given is a function number of hours needed to produce a unit, the number of units to product and the cost per labor hour.

The total budgeted direct labor cost is the product of these elements. Given that a unit requires 3 hours, the total number of hours required to produce 23400 units

= 23400 * 3

= 70200 hours

If the labor cost per hour is $12, the total budgeted direct labor cost for May

= 70200 * $12

= $842,400