Question

If it takes two direct labor hours to produce each unit and Northwest's cost per labor hour is $15, direct labor cost for August would be budgeted at:

A. $16,500.
B. $31,200.
C. $33,000.
D. $34,800.
E. Some other amount.

Answer 1

The direct labor cost for Northwest cannot be determined without knowing the number of units planned for production in August, as the number of units is essential for the calculation.

Step-by-step explanation:

The question asks about budgeting the direct labor cost for a company named Northwest for the month of August. Given that each unit requires two direct labor hours to produce and the cost per labor hour is $15, to find the direct labor cost, you need to know the number of units planned for production. However, this vital piece of information is missing from the question presented, which means that without it, we cannot calculate the direct labor cost or select the correct answer from the options provided (A, B, C, D, or E).

Therefore, based on the available data, the direct labor cost for Northwest for the month of August can't be precisely determined. We can formulate an equation to calculate this cost if the number of units (let's say 'x') were known: Direct labor cost = Number of units (x) × 2 hours per unit × $15 per hour.