Big Bang Electronic Inc. is a firm manufacturing specialized electronic chips. Due to the small size of the electronic chips, much of the manufacturing has
Big Bang Electronic Inc. is a firm manufacturing specialized electronic chips. Due to the small size of the electronic chips, much of the manufacturing has to replv on high-skilled workers, and the production process is labour intensive. The company adopts a zero inventory policy, which means that production volume alwavs equals sales volume. 'he budgeted annual production of electronic chips for 2020 were 124,000 units with a budgeted selling price of $4 each unit. The budgeted direct labour hour for producing each unit of electronic chip was 3 minutes. "he budgeted direct labour rate was 525 per hour. "he actual costs and revenue for the electronic chips in 2020 were as follows: Production and sales volume of electronic chips 120,000 units Selling price per unit 54.00 Labour cost incurred for 7,000 hours $154,000 Required a} What is the company's. budgeted direct labour cast under the static budget and flexible budget res pectivelv? [4 ma rks}
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