Question

Movers Company manufactures sneakers. The production of their new sneaker for the coming three months is budgeted as follows:​ ​ August 30,000 September 50,000 October 35,000 Each sneaker requires 2 hours of direct labor time. Direct labor wages average $15 per hour. Monthly overhead averages $10 per direct labor hour plus fixed overhead of $4,500. What is the direct labor cost budgeted for September?

Answer 1

Direct labor cost= $1,500,000

Explanation:

Giving the following information:

Production:

September 50,000

Each sneaker requires 2 hours of direct labor time.

Direct labor wages average $15 per hour.

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

Direct labor hours= 50,000*2= 100,000 hours

Now, the direct labor cost:

Direct labor cost= 100,000*15= $1,500,000