Deep Valley Foods manufactures a product that is first smoked and then packed for shipment...
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Accounting
Deep Valley Foods manufactures a product that is first smoked and then packed for shipment to customers. During a normal month the products direct labor cost per pound is budgeted using the following information.
Direct Labor Hours (per pound)
Budgeted Direct Labor Cost (per hour)
Process:
Smoking
0.08
$20
Packing
0.06
12
The budget for March calls for the production of 500,000 pounds of product. However, Marchs direct labor costs for smoking are expected to be 5 percent above normal due to anticipated scheduling inefficiencies. Yet direct labor costs in the packing room are expected to be 4 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 Budget for Direct Labor Costs For the Month Ended March 31st
Total
Smoking
Packing
Smoking
Packing
Totals
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