LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 3.1 hours of direct labor at the rate of $27.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June. The company plans to sell 40,000 units of Product WZ in June. The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively.

The budgeted direct labor cost per unit of Product WZ would be:

Direct labor budget:

Total hours = 123,690 hours

Total cost = $3,339,630

Explanation:

Giving the following information:

Direct labor per unit = 3.1 hour

Direct labor rate = $27

Production budget for June:

Sales = 40,000 units

Ending inventory = 100 units

Beginning inventory = (200) units

Total production = 39,900 units

Now, we can determine the total number of hours required and the total cost:

Direct labor budget:

Total hours = 39,900*3.1 = 123,690 hours

Total cost = 123,690*27 = $3,339,630