The LFM Company Makes and Sells a Single Product: Product

question 23

Multiple Choice

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.The finished goods inventories on June 1 and June 30 were budgeted at 500 and 700 units,respectively.What would be the budgeted direct labour costs incurred in June?

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

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Definitions:

Acid Test Ratio

A financial metric used to evaluate a company's short-term liquidity position by comparing its most liquid assets (excluding inventory) to its current liabilities.

Debt to Assets

A financial ratio that measures the proportion of a company’s total debt to its total assets, indicating the degree of leverage.

Financed by Creditors

A phrase indicating that a portion of a company's funding or assets has been obtained through borrowing from lenders.

Total Assets

The sum of all owned resources (assets) that have economic value which a company or individual possesses.