Answer the following questions using the information below:
Wallace Company provides the following data for next year:
The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
-Shamokin Manufacturing produces two products, Big and Bigger. Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period. Currently, Shamokin has 800 units of Bigger on hand. Bigger requires two labor operations, molding and polishing. Each unit of Bigger requires one hour of molding and two hours of polishing. The direct labor rate for molding is $20 per molding hour and the direct labor rate for polishing is $25 per polishing hour. The expected number of hours of direct labor for Bigger is:

Question

Answer the following questions using the information below:
Wallace Company provides the following data for next year:
  The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
-Shamokin Manufacturing produces two products, Big and Bigger. Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period. Currently, Shamokin has 800 units of Bigger on hand. Bigger requires two labor operations, molding and polishing. Each unit of Bigger requires one hour of molding and two hours of polishing. The direct labor rate for molding is $20 per molding hour and the direct labor rate for polishing is $25 per polishing hour. The expected number of hours of direct labor for Bigger is:

Quizplus · Accepted Answer

To produce 10,000 units of Bigger, Shamokin needs to have 10,000 + 2,000 - 800 = 11,200 units of Bigger produced. 
Each unit of Bigger requires 1 hour of molding and 2 hours of polishing. Therefore, Shamokin needs 11,200 hours of molding and 22,400 hours of polishing ((10,000 + 2,000 - 800) units of Bigger) x (1 hour of molding/1 unit of Bigger) = 11,200 hours of molding and ((10,000 + 2,000 - 800) units of Bigger) x (2 hours of polishing/1 unit of Bigger) = 22,400 hours of polishing. Therefore, the best choice is B.

Answer the Following Questions Using the Information Below