Budgeting labor costs, Deep Valley Foods manufactures a

Budgeting labor costs

Reference no: EM131005012

A Budgeting Labor Costs

Deep Valley Foods manufactures a product that is first smoked and then packed for shipment to customers. The product's direct labor cost per pound is budgeted using the following information:

Direct Labor Hours Budgeted Direct Labor

per Pound Cost per Hour

Process:

Smoking................................. .04 $10.00

Packing.................................. .01 8.00

The budget for March calls for the production of 500,000 pounds of product. March's direct labor costs for smoking are expected to be 5% above budget due to anticipated scheduling inefficiencies. However, direct labor costs in the packing room are expected to be 3% below budget because of changes in equipment layout.

Instructions

Prepare a budget for direct labor costs in March. Use three column headings: Total, Smoking, and Packing.

Reference no: EM131005012

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