Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:The budgeted selling price per unit is $104. Budgeted unit sales for October, November, December, and January are 6,900, 7,100, 11,300, and 15,300 units, respectively. All sales are on credit.Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.The ending finished goods inventory equals 20% of the following month's sales.The ending raw materials inventory equals 30% of the following month's raw materials production needs. Each unit of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound.The direct labor wage rate is $23.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours.The estimated direct labor cost for November is closest to:

Question

Quizplus · Accepted Answer

To estimate the direct labor cost for November, we first need to determine the number of units to be produced in November. The production needs are based on sales for November plus the ending inventory for November (which is 20% of December's sales) minus the beginning inventory for November (which is 20% of November's sales).November sales = 7,100 unitsDecember sales = 11,300 units20% of December sales = 11,300 * 20% = 2,260 units (ending inventory for November)20% of November sales = 7,100 * 20% = 1,420 units (beginning inventory for November)Units to be produced in November = November sales + Ending inventory for November - Beginning inventory for November= 7,100 + 2,260 - 1,420= 7,940 unitsEach unit requires 2.5 direct labor-hours at a wage rate of $23.00 per hour.Direct labor cost for November = Units to be produced in November * Direct labor-hours per unit * Wage rate= 7,940 units * 2.5 hours/unit * $23.00/hour= $456,550

Rokosz Corporation Makes One Product and It Provided the Following