LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.5 hours of direct labor at the rate of $14.50 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.The company plans to sell 39,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively. Budgeted direct labor costs for June would be:

Question

Quizplus · Accepted Answer

To calculate the budgeted direct labor costs for June, first determine the total number of units to be produced. This includes the units planned to be sold plus the ending inventory, minus the beginning inventory: 39,000 units to be sold + 100 units ending inventory - 200 units beginning inventory = 38,900 units to be produced. Then, calculate the total direct labor hours needed: 38,900 units * 3.5 hours/unit = 136,150 hours. Finally, calculate the total direct labor cost: 136,150 hours * $14.50/hour = $1,974,175.

LBC Corporation Makes and Sells a Product Called Product WZ