If the budgeted direct labor hours are 3550 and direct labor cost rate is $500 per labor hour, then total direct labor cost would be __________?
Correct answer: A. $1,775,000
- A. $1,775,000
- B. $1,675,000
- C. $1,875,000
- D. $1,975,000
Explanation
Total direct labor cost is found by multiplying hours by the hourly rate: 3,550 × $500 = $1,775,000. The other amounts result from using an incorrect labor-hour or rate figure.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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