Emerald Marine Stores Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor.Emerald uses standard costs to prepare its flexible budget.For the first quarter of 2015,direct material and direct labor standards for one of their popular products were as follows: Direct materials: 3 pounds per unit; $4 per pound
Direct labor: 4 hours per unit; $15 per hour
During the first quarter,Emerald produced 5,000 units of this product.Actual direct materials and direct labor costs were $65,000 and $325,000,respectively.
For the purpose of preparing the flexible budget,what is the total standard direct labor cost at a production volume of 5,000 units?

Question

Quizplus · Accepted Answer

The standard direct labor cost is calculated by multiplying the standard labor hours per unit by the standard labor rate per hour and then by the number of units produced. For 5,000 units, it is 4 hours/unit * $15/hour * 5,000 units = $300,000.

Emerald Marine Stores Company Manufactures Special Metallic Materials and Decorative