Carson Products Inc. manufactures LEDs (light emitting diodes) for use in vehicles. On September 30, the company had 5,000 LED units in inventory. The company's policy is to maintain a LED ending inventory equal to 25% of next month's expected sales. In addition, each LED manufactured requires 2 minutes of assembly and inspecting time at a cost of $.30 per minute. The company expects the following sales activity for the fourth quarter of the year:
What is the projected direct labor cost for November?
A) $72,000
B) $63,000
C) $60,000
D) $57,000

Question

Carson Products Inc. manufactures LEDs (light emitting diodes) for use in vehicles. On September 30, the company had 5,000 LED units in inventory. The company's policy is to maintain a LED ending inventory equal to 25% of next month's expected sales. In addition, each LED manufactured requires 2 minutes of assembly and inspecting time at a cost of $.30 per minute. The company expects the following sales activity for the fourth quarter of the year:
 What is the projected direct labor cost for November?
A) $72,000 
B) $63,000 
C) $60,000 
D) $57,000

Quizplus · Accepted Answer

The Answer of Carson Products Inc. manufactures LEDs (light emitting diodes) for use in vehicles. On September 30, the company had 5,000 LED units in inventory. The company's policy is to maintain a LED ending inventory equal to 25% of next month's expected sales. In addition, each LED manufactured requires 2 minutes of assembly and inspecting time at a cost of $.30 per minute. The company expects the following sales activity for the fourth quarter of the year:
 What is the projected direct labor cost for November?
A) $72,000 
B) $63,000 
C) $60,000 
D) $57,000