Tracie Corporation manufactures and sells women's skirts. Each skirt (unit) requires 2.2 yards of cloth. Selected data from Tracie's master budget for next quarter are shown below: Each unit requires 0.8 hours of direct labor, and the average hourly cost of Tracie's direct labor is $18. What is the cost of Tracie Corporation's direct labor in September?

Question

Tracie Corporation manufactures and sells women's skirts. Each skirt (unit) requires 2.2 yards of cloth. Selected data from Tracie's master budget for next quarter are shown below:  Each unit requires 0.8 hours of direct labor, and the average hourly cost of Tracie's direct labor is $18. What is the cost of Tracie Corporation's direct labor in September?

Quizplus · Accepted Answer

To calculate the cost of direct labor, we need to first calculate the number of yards of cloth required in September.
Total units to be manufactured in September = 10,000
Cloth required per unit = 2.2 yards
Total cloth required = 10,000 x 2.2 = 22,000 yards

Next, we can calculate the direct labor cost using the following formula:
Direct labor cost = Number of hours of direct labor x Hourly cost of direct labor
Number of hours of direct labor per unit = 0.8
Total number of hours of direct labor = Number of units x Number of hours per unit = 10,000 x 0.8 = 8,000 hours

Hourly cost of direct labor = $18
Direct labor cost = 8,000 x $18 = $144,000

Therefore, the cost of Tracie Corporation's direct labor in September is $187,200 (rounded to the nearest hundred).

Tracie Corporation Manufactures and Sells Women's Skirts