The budgeted production of Capricorn, Inc. is 10,000 units per month. Each unit requires 20 minutes of direct labor to complete. The direct labor rate is $100 per hour. Calculate the budgeted cost of direct labor for the month. (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.)

The budgeted cost of direct labor for the month is $333,333.

Explanation:

This question can be solved using rules of three.

The direct labor rate is $100 per hour.

Each unit requires 20 minutes of direct labor to complete.

An hour has 60 minutes, so in an hour, 60/20 = 3 units can be made.

This means that the cost of 3 units is $100.

10,000 units per month.

How much do 10,000 units cost?

3 units - 100

10,000 units - $x

The budgeted cost of direct labor for the month is $333,333.

the answer is a.

by: nicholas dooley