Reference: 07-10 The LFM Company Makes and Sells a Single Product, Product

question 23

Multiple Choice

Reference: 07-10
The LFM Company makes and sells a single product, Product T. Each unit of Product T requires 1.3 hours of labour at a labour rate of $9.10 per hour. LFM Company needs to prepare a Direct Labour Budget for the second quarter of next year.
-The company has budgeted to produce 25,000 units of Product T in June. goods inventories on June 1 and June 30 were budgeted at 500 and 700 units, respectively. Budgeted direct labour costs incurred in June would be:

• A)$295,750.
• B)$304,031.
• C)$227,500.
• D)$293,384.

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Definitions:

Interest Rates

The cost of borrowing money or the return on savings, typically expressed as a percentage of the principal sum annually.

Money Supply

The sum of all financial resources circulating within an economy at a particular moment, encompassing cash, coins, and the amounts present in checking and savings accounts.

Recessionary Gap

The difference between the actual output of an economy and its potential output at full employment, during a recession.

Discount Rate

The rate at which the central bank lends money to commercial banks and other financial institutions through its discount window.