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

question 24

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 budgeted direct labour cost per unit of Product T would be:

• A)$10.40.
• B)$7.00.
• C)$9.10.
• D)$11.83.

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Definitions:

Negative Externalities

Costs suffered by a third party as a result of an economic transaction.

Government Tax

is a compulsory financial charge or levy imposed by a government on individuals or corporations to fund public expenditures.

Allocation of Resources

The process of distributing available resources among various uses or projects in an effort to achieve strategic goals and efficiency.

Anytown

A hypothetical or generic place used as a stand-in name for any town or city in discussions or examples.