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:

Cost Center

A department or unit within an organization that does not directly contribute to profit but incurs costs for its operation.

Responsibility Center

Any business segment whose manager has control over costs, revenues, or investments in operating assets.

Queue Time

The duration a product or job order spends waiting to be processed, not including the time actually taken to complete the task.

Non-value-added Time

Time during production that does not directly contribute to the final value of the product, such as waiting times or transportation of goods.