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.
-If the budgeted direct labor cost for April is $201,600,then the budgeted production of Pods for April 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.
-If the budgeted direct labor cost for April is $201,600,then the budgeted production of Pods for April would be:

Quizplus · Accepted Answer

Budgeted direct labor cost = Budgeted production × 1.4 direct labor-hours per unit × $9.60 per direct labor-hour
$201,600 = Budgeted production × 1.4 direct labor-hours per unit × $9.60 per direct labor-hour
$201,600 = Budgeted production × $13.44 per unit
Budgeted production = $201,600 ÷ $13.44 per unit = 15,000 units

Acti Manufacturing Corporation Is Estimating the Following Raw Material Purchases