Deep Valley Foods manufactures a product that is first smoked and then packed fo

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 cost per pound is budgeted using the following information:

The budget for March calls for the production of 400,000 pounds of product. However, March’s 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.

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:

Explanation / Answer

Budgeted Direct Labour cost Particulars         Smoking         Packing Total Revised Direct Labour cost per hour 16.96 8.82 Direct Labor Hours (per pound) 0.05 0.02 Direct Labor Hours for 400000 pound 20000 8000 28000 Budgeted Direct labour cost 339200 70560 409760

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