Question

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 2.1 direct labor-hours at $10.30 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 22,700 Pods. Budgeted direct labor costs incurred in June would be: (Round your intermediate calculations to 2 decimal places.) Multiple Choice $233,810 $491,001 $279,480 $671,280

Answer 1

$491,001

Step-by-step explanation:

The computation of the budgeted direct labor cost is shown below:

But before that first we have to compute the per direct labor cost which is

= 2.1 direct labor hours × $10.3 per direct labor hour

= $21.63

Now the budgeted direct labor budget is

= $21.63 × 22,700 Pods

= $491,001

We simply multiplied the per direct labor cost with the budgeted production units so that the budgeted direct labor cost incurred could come