Question

Deleon Inc. is preparing its annual budgets for the year ending December 31, 2020. Accounting assistants furnish the data shown below.

		Product JB 50		Product JB 60

Sales budget: Anticipated volume in units 401,600 203,100 Unit selling price $21 $27 Production budget: Desired ending finished goods units 27,100 17,000 Beginning finished goods units 31,100 13,300 Direct materials budget: Direct materials per unit (pounds) 2 3 Desired ending direct materials pounds 33,300 17,600 Beginning direct materials pounds 41,800 12,000 Cost per pound $3 $3 Direct labor budget: Direct labor time per unit 0.4 0.6 Direct labor rate per hour $11 $11 Budgeted income statement: Total unit cost $13 $21

Prepare the direct labor budget for the year.

Answer 1

Direct Labor Budget
For the year ending December 31, 2020
	JB 50	JB 60	Total
Units to be Produced	397600	206800
Direct Labor Time per Unit	0.4	0.6
Total Required Direct Labor Hours	159040	124080
Direct Labor Cost per Hour	11	11
Total Direct Labor Cost	1749440	1364880	3114320
Workings:
	JB 50	JB 60
Budgeted sales	401600	203100
Add: Desired ending finished goods	27100	17000
Less: Beginning finished goods units	-31100	-13300
Units to be Produced	397600	206800