The Following Direct Labor Information Pertains to the Manufacture of Product

question 137

Multiple Choice

The following direct labor information pertains to the manufacture of product Glaze:
$$\begin{array} { l c } \text { Time required to make one unit } & \text { 3direct labor hours } \\\text { Number of direct workers } & 25 \\\text { Number of productive hours per week, per worker } & 36 \\\text { Weekly wages per worker } & \mathbf { 7 0 0 } \\\text { Workers' benefits treated as direct labor costs } & 30 \% \text { of wages }\end{array}$$
What is the standard direct labor cost per unit of product Glaze? (CPA adapted)

• A) $19.44.
• B) $25.28.
• C) $58.33.
• D) $75.83.

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Definitions:

Absorption Costing

A method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and the government.

Generally Accepted Accounting Principles

The common set of accounting principles, standards, and procedures that companies use to compile their financial statements.

Profit-volume Chart

A graphical representation that shows the relationship between a business's profit and its volume of sales.