The Total Direct Labor Hours Required in Preparing a Direct

question 96

Multiple Choice

The total direct labor hours required in preparing a direct labor budget are calculated using the

• A) sales forecast.
• B) production budget.
• C) direct materials budget.
• D) sales budget.

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Definitions:

Absorption Costing

An accounting method that includes both variable and fixed manufacturing costs in the cost of a product.

Production Costs

Expenses directly and indirectly involved in creating a product, including materials, labor, and overhead costs.

Absorption Costing

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

Net Income

The total profit of a company after all expenses, including taxes, have been subtracted from total revenues.