NBN Corporation has planned to produce 7,000 units each of NPS 1 (length 12 meters) and NPS 3 (length 12 meters) steel pipes in the month of August. It is estimated that it will takes 3 hours to produce each type of pipe. The following table provides the additional information on this:
If the expected rate for direct labor is $15 per hour, then the total expected direct labor cost for August will be
A) $84,000.
B) $105,000.
C) $315,000.
D) $630,000.

Question

NBN Corporation has planned to produce 7,000 units each of NPS 1 (length 12 meters) and NPS 3 (length 12 meters) steel pipes in the month of August. It is estimated that it will takes 3 hours to produce each type of pipe. The following table provides the additional information on this:
 If the expected rate for direct labor is $15 per hour, then the total expected direct labor cost for August will be
A) $84,000. 
B) $105,000. 
C) $315,000. 
D) $630,000.

Quizplus · Accepted Answer

Budgeted Direct Labor Cost = (Budgeted Production Units × Quantity of Direct Labor Hours per Unit) × Budgeted Direct Labor Cost per Hour = (14,000 × 3) × $15 = $630,000.

NBN Corporation Has Planned to Produce 7,000 Units Each of NPS