Question

Smith Corporation makes and sells a single product called a Pod. Each Pod requires 1.4 direct labor-hours at $9.60 per direct labor-hour. The direct labor workforce is fully adjusted each month to the required workload. Smith Corporation is preparing a Direct Labor Budget for the second quarter of the year. The budgeted direct labor cost per Pod is closest to:

Multiple Choice
A. $13.44
B. $9.60
C. $7.38
D. $11.00

Answer 1

Answer:

option (A) $13.44

Explanation:

Data provided in the question:

Direct labor hours required by each pod = 1.4

Direct labor rate = $9.60 per direct labor-hour

The budgeted direct labor cost per Pod will be

= Direct labor hours required by each pod × Direct labor rate

or

The budgeted direct labor cost per Pod

= 1.4 labor hours × $9.60 per direct labor-hour

= $13.44

Hence,

The correct answer is option (A) $13.44