Strand Company is planning to sell 400 buckets and produce 380 buckets during March. Each bucket requires 500 grams of plastic and one-half hour of direct labor. Plastic costs $10 per 500 grams and employees of the company are paid $15.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Strand has 300 kilos of plastic in beginning inventory and wants to have 200 kilos in ending inventory. How much is the total amount of budgeted direct labor for March?
A) $3000
B) $6000
C) $2850
D) $57000

Question

Quizplus · Accepted Answer

First, we need to calculate the budgeted direct labor cost.

Each bucket requires 0.5 hours of direct labor, so 380 buckets will require 190 hours of direct labor. The cost of this direct labor will be:

190 hours x $15 per hour = $2,850

Therefore, the correct answer is C.

Strand Company Is Planning to Sell 400 Buckets and Produce