Zhang Industries Budgets Production of 300 Units in June and 310

question 50

Multiple Choice

Zhang Industries budgets production of 300 units in June and 310 units in July. Each unit requires 1.5 hours of direct labor. The direct labor rate is $14 per hour. The indirect labor rate is $21.00 per hour. Compute the budgeted direct labor cost for July.

• A) $6,300.
• B) $6,510.
• C) $9,450.
• D) $9,765.
• E) $16,275.

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Definitions:

Fixed Manufacturing Overhead Standards

Pre-determined benchmarks for the fixed costs involved in the production process, not varying with the level of output.

Budgeted Fixed Manufacturing Overhead

The estimated fixed costs involved in manufacturing that do not change with the level of production or sales volume.

Standard Cost System

A cost accounting system that assigns fixed costs to products based on predefined standards, facilitating budgeting and variance analysis.

Net Operating Income

The profit a business makes after deducting operating costs, but before removing interest and tax expenses.