Ask Question
12 November, 16:21

Pabon Corporation makes one product. Budgeted unit sales for August and September are 11,100 and 12,600 units, respectively. The ending finished goods inventory equals 40% of the following month's sales. The direct labor wage rate is $19.00 per hour. Each unit of finished goods requires 2.5 direct labor-hours. The estimated direct labor cost for August is closest to:

(A) $222,300

(B) $29,250

(C) $389,000

(D) $555,750

+4
Answers (1)
  1. 12 November, 18:12
    0
    (D) $555,750

    Explanation:

    The computation of the estimated direct cost is shown below:

    = (Sales revenue - opening stock + beginning stock) * direct labor hours * direct labor wage rate

    = ($11,100 - $4,440 + $5,040) * 2.5 hours * $19

    = $11,700 * 2.5 hours * $19

    = $555,750

    The opening stock = August sales * given percentage

    = $11,100 * 40%

    = $4,440

    The closing stock = September sales * given percentage

    = $12,600 * 40%

    = $5,040
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Pabon Corporation makes one product. Budgeted unit sales for August and September are 11,100 and 12,600 units, respectively. The ending ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers