XYZ Company is working on its direct labor budget for the next quarter (January, February and March). Each unit of product requires 0.4 hours (24 minutes) of direct labor. The direct labor normal rate is $5 per direct labor-hour. The company's direct labor work force consists of permanent employees who are guaranteed to be paid for at least 1,800 hours of work each month. If the number of required direct labor hours is less than this number, the workers are paid for 1,800 hours any way. Any hours worked in excess of 1,800 hours in a month are paid at the rate of 1.5 times the normal hourly rate for direct labor. The production budget calls for producing 5,000 units in January, 4,000 units in February, and 6,000 units in March. What would be the budgeted total direct labor cost for the quarter? Select one: O a. $39,600 b. $33,000 O c. None of the given answers O d. $30,000 o e. $46,200
XYZ Company is working on its direct labor budget for the next quarter (January, February and March). Each unit of product requires 0.4 hours (24 minutes) of direct labor. The direct labor normal rate is $5 per direct labor-hour. The company's direct labor work force consists of permanent employees who are guaranteed to be paid for at least 1,800 hours of work each month. If the number of required direct labor hours is less than this number, the workers are paid for 1,800 hours any way. Any hours worked in excess of 1,800 hours in a month are paid at the rate of 1.5 times the normal hourly rate for direct labor. The production budget calls for producing 5,000 units in January, 4,000 units in February, and 6,000 units in March. What would be the budgeted total direct labor cost for the quarter? Select one: O a. $39,600 b. $33,000 O c. None of the given answers O d. $30,000 o e. $46,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
XYZ Company is working on its direct labor budget for the next quarter (January, February
and March). Each unit of product requires 0.4 hours (24 minutes) of direct labor. The direct
labor normal rate is $5 per direct labor-hour. The company's direct labor work force consists
of permanent employees who are guaranteed to be paid for at least 1,800 hours of work each
month. If the number of required direct labor hours is less than this number, the workers are
paid for 1,800 hours any way. Any hours worked in excess of 1,800 hours in a month are paid
at the rate of 1.5 times the normal hourly rate for direct labor. The production budget calls
for producing 5,000 units in January, 4,000 units in February, and 6,000 units in March. What
would be the budgeted total direct labor cost for the quarter?
Select one:
O a. $39,600
b. $33,000
O c. None of the given answers
O d. $30,000
o e. $46,200
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