Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:
At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase.
-In June the company has budgeted to produce 22,000 Pods.Budgeted direct labor costs incurred in June would be:

Question

Acti Manufacturing Corporation is estimating the following raw material purchases for the final four months of the year:
  At Acti, 40% of raw materials purchases are normally paid for in the month of purchase. The remaining 60% is paid for in the month following the purchase.
-In June the company has budgeted to produce 22,000 Pods.Budgeted direct labor costs incurred in June would be:

Quizplus · Accepted Answer

Budgeted direct labor cost
= Budgeted production × 1.4 direct labor-hours per unit × $9.60 per direct labor-hour
= 22,000 units × 1.4 direct labor-hours per unit × $9.60 per direct labor-hour
= 22,000 units × $13.44 per unit = $295,680

Acti Manufacturing Corporation Is Estimating the Following Raw Material Purchases