Answer the following questions using the information below:
Shamokin Manufacturing produces a Tourbillon watch movement called OM362. Shamokin expects to sell 10,000 units of OM362 and to have an ending finished inventory of 2,000 units. Currently, it has a beginning finished inventory of 800 units. Each unit of OM362 requires two labor operations, one labor hour of assembling and two labor hours of polishing. The direct labor rate for assembling is $10 per assembling hour and the direct labor rate for polishing is $12.50 per polishing hour.
-The expected number of hours of direct labor for OM362 Bigger is ________.

Question

Quizplus · Accepted Answer

To produce 10,000 units with an ending finished inventory of 2,000 units and a beginning finished inventory of 800 units, Shamokin needs to produce 8,800 units (10,000 + 2,000 – 800) of OM362 during the period. Each unit requires one hour of assembling and two hours of polishing, so the expected number of hours for direct labor is 8,800 hours of assembling (8,800 units x 1 hour) and 22,400 hours of polishing (8,800 units x 2 hours). Therefore, the best choice is B, which shows 11,200 hours of assembling and 22,400 hours of polishing.

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