Question

Lidell Inc. budgeted production of 48,000 personal journals in 20Y6. Each journal requires assembly. Assume that three minutes are required to assemble each journal. If assembly labor costs $13 per hour, determine the direct labor cost budget for 20Y6. Do not round your intermediate calculations but, if required, round your final answer to the nearest dollar.

Answer 1

Direct labor cost= $31,200

Step-by-step explanation:

Giving the following information:

Production= 48,000 units

Standard time= 3 minutes per unit

Rate= $13 per hour

First, we need to calculate the number of hours required:

The proportion of minuted per hour= 3/60= 0.05

Number of hours= 48,000*0.05= 2,400 hours

Now, the direct labor cost:

Direct labor cost= 2,400*13= $31,200