Question

BC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 4.0 hours of direct labor at the rate of $19.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

The company plans to sell 29,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 510 and 90 units, respectively. Budgeted direct labor costs for June would be:

Answer 1

Budgeted Direct Labor Cost per unit

Budgeted Direct Labor Cost per unit = 4 hours of direct labor per unit x $19.00 per direct labor hour

= $76.00 per Direct Labor Hour

Budgeted Direct Labor Costs for the month of June

(a)	Budgeted number of units sold	29,000 units
(b)	(+) Finished goods inventory at the end	90 units
(c)	(-) Finished goods inventory at the beginning	510 units
(d)	The required production in units	28,580 units
(e)	The Direct labor hours per unit	4 Hours per unit
(f)	Total direct labor hours required for the production (d) x (e)	114,320 Labor Hours
(g)	Direct labor cost per hour	$19.00 per hour
(h)	Budgeted Direct Labor Costs for the month of June (f) x (g)	$2,172,080