If the budgeted total direct labour hours are 4, 000 hours and budgeted direct labour cost is RM480, 000, then the budgeted direct labour cost rate will be:

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	RM 126.32 per labour hour
B	RM 128.32 per labour hour
C	RM 120.00 per labour hour
D	RM 132.00 per labour hour

Explanation:

Detailed explanation-1: -The correct answer is B. The budgeted total direct labor cost is calculated by multiplying the direct labor cost rate and budgeted direct labor hours.

Detailed explanation-2: -The direct labor cost formula is a simple equation for determining direct labor cost. The pay rate multiplied by the time spent working on the project yields the direct labor cost, or Direct Labor Cost= Pay Rate * Project Time.

Detailed explanation-3: -Calculate the direct labor hours The figure is obtained by dividing the total number of finished products by the total number of direct labor hours needed to produce them. For example, if it takes 100 hours to produce 1, 000 items, 1 hour is needed to produce 10 products and 0.1 hours to produce 1 unit.

Detailed explanation-4: -Total labor cost is the aggregate cost of the hours worked by all employees, plus all related payroll taxes and benefits. This amount is used in the budgeting of financial results for a business.

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