Krause Company Manufactures Pool Tables

question 79

Multiple Choice

Krause Company manufactures pool tables.The company has a policy of maintaining a finished goods inventory equal to 35 percent of the next month's planned sales.Each card table requires 4 hours of labor.The budgeted labor rate for the coming year is $12 per hour.Planned sales for the months of July,August,and September are respectively 6,000; 8,000; and 5,000 units.What is Krause Company's budgeted direct labor cost for August?

• A)$ 83,400
• B)$333,600
• C)$417,600
• D)$434,400

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Definitions:

Critical Items

Goods or components crucial for the manufacturing process or customer satisfaction, often given higher priority in inventory management.

Inventory

The total amount of goods stored by a company that is ready or will be ready for sale.

Service Inventory

Intangible goods in a service operation that cannot be stored or inventoried in the traditional sense, such as available hotel rooms or hours of consulting.