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.)

= $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