Question

Major brands, inc., a clothing manufacturer, is planning to sell 9,000 jackets during february and its production is estimated at 8,700 jackets during february. each jacket requires 4.4 yards of fabric at $4.00 per yard and .25 direct labor hours at $12 per hour. manufacturing overhead is applied at 110% of direct labor costs. major brands has 39,000 yards of fabric in beginning inventory and wants 45,000 yards in ending inventory. what is the total amount to be budgeted for direct labor for february?

a. $26,100
b. $104,400
c. $27,000
d. $459,360

Answer 1

The total budgeted amount for direct labor for Major Brands, Inc. in February is $26,100, calculated by multiplying the direct labor hours per jacket (0.25 hours) by the cost per direct labor hour ($12) and by the total jackets planned for production (8,700 jackets).

Step-by-step explanation:

The total amount to be budgeted for direct labor for February can be calculated using the planned production numbers and the labor requirements per unit. Major Brands, Inc. is planning to produce 8,700 jackets in February. Each jacket requires 0.25 direct labor hours at $12 per hour. Thus, we calculate the total direct labor cost as follows:

Direct Labor Hours per Jacket = 0.25 hours
Cost per Direct Labor Hour = $12
Total Jackets Planned for Production = 8,700 jackets

Total Direct Labor Cost = Direct Labor Hours per Jacket × Cost per Direct Labor Hour × Total Jackets Planned for Production
Total Direct Labor Cost = 0.25 hours × $12 × 8,700 jackets
Total Direct Labor Cost = $26,100

Therefore, the correct answer is:

a. $26,100