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28 November, 09:53

Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and 1/4 hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. What is the total amount to be budgeted for direct labor for the month? $2,610 $10,440 $2,700 $41,760

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  1. 28 November, 10:29
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    The correct answer is $2,610.

    Explanation:

    According to the scenario, computation of the given data are as follow:-

    We can calculate the the direct labor cost by using following formula:-

    Direct labor hour required = Estimated production * Direct labor hour

    = 870 * 1:4 = 217.5 hours

    Direct labor cost = Direct required labor hour * Rate of labor per hour

    = 217.5 hours * $12

    = $2,610

    According to the analysis, $2,610 is the total amount to be budgeted for direct labor.
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