The budgeted production of Capricorn,Inc.is 10,000 units per month.Each unit requires 20 minutes of direct labor to complete.The direct labor rate is $100 per hour.Calculate the budgeted cost of direct labor for the month.(Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

The budgeted cost of direct labor is calculated as follows:Budgeted production = 10,000 unitsDirect labor time per unit = 20 minutesDirect labor rate = $100 per hourDirect labor hours = Budgeted production * Direct labor time per unit= 10,000 units * 20 minutes= 200,000 minutesDirect labor cost = Direct labor hours * Direct labor rate= 200,000 minutes * $100 per hour= $20,000,000Budgeted cost of direct labor = $20,000,000 / 12= $1,666,666.67= $1,666,667 (rounded to the nearest dollar)

The Budgeted Production of Capricorn,Inc