Madrid Co.has a direct labor standard of 4 hours per unit of output.Each employee has a standard wage rate of $11 per hour.During February,Madrid Co.paid $99,500 to employees for 9,150 hours worked.2,400 units were produced during February.What is the flexible budget amount for direct labor?
A)$26,400
B)$99,500
C)$100,650
D)$105,600

Question

Quizplus · Accepted Answer

The flexible budget for direct labor is calculated by multiplying the standard hours per unit by the number of units produced and the standard wage rate. Thus, 4 hours/unit * 2,400 units * $11/hour = $105,600.

Madrid CoHas a Direct Labor Standard of 4 Hours Per Unit