US CMA Part 1 · Chapter 2 · Question 14 of 30
A company plans to produce 25,500 units next quarter. Each unit requires 0.75 direct labor hours, and the wage rate is $28 per hour. What is the direct labor budget?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) $535,500
Explanation
Direct labor hours = 25,500 units x 0.75 = 19,125 hours. Budget = 19,125 x $28 = $535,500. The budget is driven by production, not sales.
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