Nevis' production data for one of its products were taken from the most recent quarterly production budget: If it takes two direct labor hours to produce each unit and Nevis' cost per labor hour is $15, direct labor cost for August would be budgeted at:

Question

Nevis' production data for one of its products were taken from the most recent quarterly production budget:  If it takes two direct labor hours to produce each unit and Nevis' cost per labor hour is $15, direct labor cost for August would be budgeted at:

Quizplus · Accepted Answer

The production budget shows that Nevis plans to produce 2,200 units. If it takes two direct labor hours to produce each unit, then Nevis will require a total of 2,200 x 2 = 4,400 direct labor hours in August. 
If Nevis' cost per labor hour is $15, then the direct labor cost for August would be:
4,400 x $15 = $66,000 
Therefore, the correct answer is (C) $33,000.

Nevis' Production Data for One of Its Products Were Taken