COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Budgeted direct labour cost per unit
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Expected direct labour cost per unit
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Forecasted direct labour cost per unit
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Estimated direct labour cost per unit
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Detailed explanation-1: -Multiply the labor cost for each unit times the total number of units you plan to produce. For example, if you foresee producing 100, 000 units, you know your cost will be $3 times 100, 000 for a total direct labor cost of $300, 000.
Detailed explanation-2: -The basic calculation used by the budget is to import the number of units of production from the production budget and to multiply this by the standard number of labor hours for each unit. This yields a subtotal of the direct labor hours needed to meet the production target.
Detailed explanation-3: -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-4: -A direct labor rate is calculated simply by dividing the estimated total labor cost by the total direct labor hours.