Question
Deep Valley Foods manufactures a product that is first smoked and then packed for shipment to customers. During a normal month the product's direct labor
Deep Valley Foods manufactures a product that is first smoked and then packed for shipment to customers. During a normal month the product's direct labor cost per pound is budgeted using the following information: |
| Direct Labor Hours (per pound) | Budgeted Direct Labor Cost (per hour) | ||
Process: |
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Smoking | 0.05 | $ | 16 |
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Packing | 0.02 |
| 9 |
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The budget for March calls for the production of 400,000 pounds of product. However, Marchs direct labor costs for smoking are expected to be 6 percent above normal due to anticipated scheduling inefficiencies. Yet direct labor costs in the packing room are expected to be 2 percent below normal because of changes in equipment layout. |
Prepare a budget for direct labor costs in March using three column headings: Total, Smoking, and Packing. |
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