Projected sales for Kenworth Inc. for next year and beginning and ending inventory data are as follows:
Each unit requires 5 pounds of material which costs $3.00 per pound. The beginning inventory of raw materials is 5,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of the year. Each unit produced requires 2 hours of direct labour time, which is billed at $8 per hour.
-The budgeted total direct labour cost would be

Question

Projected sales for Kenworth Inc. for next year and beginning and ending inventory data are as follows:
  Each unit requires 5 pounds of material which costs $3.00 per pound. The beginning inventory of raw materials is 5,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of the year. Each unit produced requires 2 hours of direct labour time, which is billed at $8 per hour.
-The budgeted total direct labour cost would be

Quizplus · Accepted Answer

The budgeted total direct labour cost would be $320,000. This is calculated by multiplying the budgeted direct labour hours by the direct labour rate. The budgeted direct labour hours are 80,000 hours, and the direct labour rate is $4 per hour.

Projected Sales for Kenworth Inc