If the budgeted total direct labor hours are 5500 and budgeted direct labor cost is $755000, then the budgeted direct labor cost rate is _________?
Correct answer: B. $137.27 per hour
- A. $138 per labor hour
- B. $137.27 per hour
- C. $140 per labor hour
- D. $142 per labor hour
Explanation
The direct labor cost rate equals budgeted direct labor cost divided by budgeted labor hours: $755,000 ÷ 5,500 = $137.27 per hour. Therefore, option b is correct.
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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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