Staci Pearce is preparing a direct labor budget.Her sales budget shows total sales units of 15,000 and sales dollars of $45,000.The direct materials purchases budget shows materials to be purchased of 25,000 units and budgeted purchases cost of $18,750.The production budget indicates a total of 25,000 units to be produced.Standard direct labor hours per unit is .50 and the standard average wage rate is $10.What is budgeted direct labor cost?
A)$125,000
B)$143,750
C)$188,750
D)$250,000

Question

Quizplus · Accepted Answer

The budgeted direct labor cost is calculated by multiplying the total units to be produced (25,000 units) by the standard direct labor hours per unit (0.5 hours) and then multiplying the result by the standard average wage rate ($10). This calculation is: 25,000 units * 0.5 hours/unit * $10/hour = $125,000.

Staci Pearce Is Preparing a Direct Labor Budget