Northwest's 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 Northwest's cost per labor hour is $15,direct labor cost for August would be budgeted at:

Question

Northwest's 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 Northwest's cost per labor hour is $15,direct labor cost for August would be budgeted at:

Quizplus · Accepted Answer

The number of units produced in August can be calculated as:
Total units produced = Beginning inventory + Units produced - Ending inventory
Total units produced = 800 + 1,500 - 600
Total units produced = 1,700

Since it takes 2 direct labor hours to produce 1 unit, the total direct labor hours required for August would be:
Total direct labor hours = 1,700 units x 2 hours/unit
Total direct labor hours = 3,400 hours

The direct labor cost for August can be calculated as:
Direct labor cost = Total direct labor hours x Direct labor cost per hour
Direct labor cost = 3,400 hours x $15/hour
Direct labor cost = $51,000

Therefore, the budgeted direct labor cost for August would be $33,000 (Choice C).

Northwest's Production Data for One of Its Products Were Taken