James Worman is preparing a direct labor budget.His sales budget shows total sales units of 15,000 and sales dollars of $18,750.The direct materials purchases budget shows materials to be purchased of 15,000 units and budgeted purchases cost of $3,750.The production budget indicates a total of 12,000 units to be produced.Standard direct labor hours per unit are 0.30 and the standard average wage rate is $15.What is budgeted direct labor cost?
A)$67,500
B)$54,000
C)$180,000
D)$225,000

Question

Quizplus · Accepted Answer

First, calculate the total direct labor hours needed: 
12,000 units x 0.30 hours per unit = 3,600 direct labor hours

Then, calculate the budgeted direct labor cost: 
3,600 direct labor hours x $15 per hour = $54,000

Therefore, the answer is B.

James Worman Is Preparing a Direct Labor Budget