Jacobsen, Inc. is planning to sell 200 buckets and produce 190 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. Jacobsen 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) $1,500
B) $3,000
C) $1,425
D) $2,850

Question

Quizplus · Accepted Answer

To find the total amount of budgeted direct labor for March, we need to calculate the total amount of direct labor required to produce the 190 buckets.

Each bucket requires one-half hour of direct labor, so 190 buckets require:

190 buckets × 1/2 hour per bucket = 95 hours of direct labor

At a rate of $15 per hour, the total amount of budgeted direct labor for March is:

95 hours × $15 per hour = $1,425

Therefore, the correct answer is (C) $1,425.