Rokosz Corporation makes one product and it provided the following information to help prepare the master budget for the next four months of operations:
a. 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.
b. Regarding credit sales, 30% are collected in the month of the sale and 70% in the following month.
c. The ending finished goods inventory equals 20% of the following month's sales.
d. 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.
e. 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

The budgeted required production for November is computed as follows:
 11ea7761_17b2_37f7_81a5_e357d4e623db_TB2580_00 *December sales of 11,300 units × 20% = 2,260 units
** November sales of 7,100 units × 20%= 1,420 units
The estimated direct labor cost for November is computed as follows:
 11ea7761_17b2_37f8_81a5_d77c04476d9b_TB2580_00

Rokosz Corporation Makes One Product and It Provided the Following