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.
-The company has budgeted to produce 28,000 units of Product T in June.The finished goods inventories on June 1 and June 30 were budgeted at 800 and 600 units,respectively.Budgeted direct labor costs for 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.
-The company has budgeted to produce 28,000 units of Product T in June.The finished goods inventories on June 1 and June 30 were budgeted at 800 and 600 units,respectively.Budgeted direct labor costs for June would be:

Quizplus · Accepted Answer

Budgeted direct labor cost
= Budgeted production × 1.5 direct labor-hours per unit × $10.50 per direct labor-hour
= 28,000 units × 1.5 direct labor-hours per unit × $10.50 per direct labor-hour
= 28,000 units × $15.75 per unit = $441,000

Acti Manufacturing Corporation Is Estimating the Following Raw Material Purchases