Looker Hats Is Planning to Sell 1,000 Felt Hats, and 800

question 6

Multiple Choice

Looker Hats is planning to sell 1,000 felt hats, and 800 will be produced during June.Each hat requires.75 metres of felt and 1/2 hour of direct labour.Felt costs $5.00 per metre and employees of the company are paid $15 per hour.How much is the total amount of budgeted direct labour for June?

• A)$9,750
• B)$45,000
• C)$6,000
• D)$7,500

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Definitions:

Activity-Based Costing

An accounting method that assigns costs to products based on the activities they require, aiming to provide more accurate costing information.

Product Diversity

The range of different products or services offered by a business to meet various customer needs and market demands.

Overhead Resources

All indirect costs involved in running a business that cannot be directly attributed to a specific product or service.

Activity-Based Costing

An accounting approach that assigns costs to products or services based on the resources they consume, aiming to provide more accurate insights into cost drivers and profitability.