Hi,

Could you please explain the solution to the following question.

Vebco manufactures a product requiring 0.5 grams of platinum per unit. The cost of platinum is approximately $360 per gram. Vebco maintains an ending inventory of platinum equal to 10% of the following month's production. The following data were taken from the most recent quarterly production budget.

Planned Production (units)

July 1000

August 1100

September 980

If each unit takes 2.5 direct labour hours to produce and Vebco's cost per labour hour is $15, determine the amount that should be budgeted for direct labour in September.