Question

The budgeted production of​ Capricorn, Inc. is 14 comma 000 units per month. Each unit requires 40 minutes of direct labor to complete. The direct labor rate is $ 90.00 per hour. Calculate the budgeted cost of direct labor for the month.​ (Round any intermediate calculations to the nearest cent and your final answer to the nearest​ dollar.)

Answer 1

Answer:

= $560,000.00

Explanation:

Budgeted labour cost = Budgeted hours × standard labour rate/hour

The labour rate is given as $90/ hour

Budgeted hours = Budgeted production units × Standard hours

Standard hours is the  amount of time worker is expected to complete a unit of a product . It is given as 40 minutes in this question.

Budgeted production units = 14,000 units

So budgeted hours = (40 × 14,000) minutes/60 minutes

                               = 9333.33 hours

Note: we needed to divide by 60 to convert the total minutes into hours

Budgeted cost of direct labor for the month

= 9,333.33 × $60

= $560,000.00