Gottberg Mugs Is Planning to Sell 2,000 Mugs and Produce

question 98

Multiple Choice

Gottberg Mugs is planning to sell 2,000 mugs and produce 2,200 mugs during April.Each mug requires 2 kilograms of resin and one-half hour of direct labour.Resin costs $1 per kilogram and employees of the company are paid $12.50 per hour.Manufacturing overhead is applied at a rate of 120% of direct labour costs.Gottberg has 2,000 kilograms of resin in beginning inventory and wants to have 2,400 kilograms in ending inventory.How much is the total amount of budgeted direct labour for April?

• A)$12,500
• B)$13,750
• C)$25,000
• D)$27,500

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