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20 March, 14:24

Lidell Inc. budgeted production of 48,000 personal journals in 20Y6. Each journal requires assembly. Assume that three minutes are required to assemble each journal. If assembly labor costs $13 per hour, determine the direct labor cost budget for 20Y6. Do not round your intermediate calculations but, if required, round your final answer to the nearest dollar.

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  1. 20 March, 16:15
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    Direct labor cost = $31,200

    Explanation:

    Giving the following information:

    Production = 48,000 units

    Standard time = 3 minutes per unit

    Rate = $13 per hour

    First, we need to calculate the number of hours required:

    The proportion of minuted per hour = 3/60 = 0.05

    Number of hours = 48,000*0.05 = 2,400 hours

    Now, the direct labor cost:

    Direct labor cost = 2,400*13 = $31,200
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