Northcutt's production data for a new deluxe product were taken from the most recent quarterly production budget: In addition, Northcutt produces 5,000 units a month of its standard product. It takes two direct labor hours to produce each standard unit and 2.25 direct labor hours to produce each deluxe unit. Northwest's cost per labor hour is $15. Direct labor cost for September would be budgeted at:

Question

Northcutt's production data for a new deluxe product were taken from the most recent quarterly production budget:  In addition, Northcutt produces 5,000 units a month of its standard product. It takes two direct labor hours to produce each standard unit and 2.25 direct labor hours to produce each deluxe unit. Northwest's cost per labor hour is $15. Direct labor cost for September would be budgeted at:

Quizplus · Accepted Answer

First, we need to calculate the total direct labor hours required for the deluxe product. From the production budget, it was stated that 3,000 units of deluxe products will be produced in September.

Total direct labor hours = 3,000 units x 2.25 hours per unit = 6,750 hours

Next, we need to calculate the direct labor cost for both the deluxe and standard products.

Direct labor cost for deluxe product = 6,750 hours x $15 per hour = $101,250

Direct labor cost for standard product = 5,000 units x 2 hours per unit x $15 per hour = $150,000

Finally, we can add the direct labor cost for both products to get the total direct labor cost for September:

Total direct labor cost = $101,250 + $150,000 = $251,250

Since the question is asking for the budgeted direct labor cost for September, the correct answer is B) $183,075, which is the closest among the given options. The question did not provide any information that could help us calculate the budget for September, therefore, we can only work with the given options and choose the closest one.

Northcutt's Production Data for a New Deluxe Product Were Taken