Answered

Discover a wealth of knowledge at Westonci.ca, where experts provide answers to your most pressing questions. Explore thousands of questions and answers from a knowledgeable community of experts ready to help you find solutions. Join our platform to connect with experts ready to provide precise answers to your questions in different areas.

WellWheats, Inc. produces breakfast cereal and sells each box, or unit, for $7. The company is projecting sales of 1,000 units for the month of March. There are 30 units in the beginning inventory. Each unit requires 20 ounces of raw materials and 0.20 direct labor hours to make. The company's policy is to keep ending finished goods inventory of 10% of the current month's sales. Selling and administrative expenses for the month have been budgeted at $2,000. If the direct labor cost per hour is $0.75, calculate the budgeted direct labor cost for the month of March.
A. $214.00
B. $160.50
C. $802.50
D. $236.00

Sagot :

Tundexi

Answer:

b. . $160.50

Explanation:

Projected Sales 1,000 units

Desired ending inventory = 10%*1,000 = 100 units

Beginning Inventory = 30 units

Required production = Projected Sales + Desired ending inventory - Beginning Inventory

Required production = 1,000 units + (10%*1,000 units) - 30 units

Required production = 1,000 units + 100 units - 30 units

Required production = 1,070 units

Labor hours per unit = 0.20

Cost per labor hour = $0.75

Budgeted labor cost for March = Required production*Labor hours per unit*Cost per labor hour

Budgeted labor cost for March = 1,070 units*$0.20*$0.75

Budgeted labor cost for March = $160.50

Hence, the budgeted labor cost for March is $160.50.

We hope this information was helpful. Feel free to return anytime for more answers to your questions and concerns. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.