Each unit of product Echo takes five direct labour hours to make. Quality standards are high, and 8% of units are rejected after completion as sub-standard. Next month's budgets are as follows.Opening inventories of finished goods 3,000 units Planned closing inventories of finished goods 7,600 units Budgeted sales of Echo 36,800 unitsAll inventories of finished goods must have successfully passed the quality control check.What is the direct labour hours budget for the month?
A、190,440 hours
B、207,000 hours
C、223,560 hours
D、225,000 hours
A、190,440 hours
B、207,000 hours
C、223,560 hours
D、225,000 hours
【参考答案及解析】
Units Planned increase in inventories of finished goods 4,600 Budgeted sales 36,800 Budgeted production (to pass quality control check) 41,400 This is 92% of total production, allowing for an 8% rejection rate. Budgeted production =100/92x41,400=45,000 units Budgeted direct labour hours = (x 5 hours per unit) 225,000 hours
Units Planned increase in inventories of finished goods 4,600 Budgeted sales 36,800 Budgeted production (to pass quality control check) 41,400 This is 92% of total production, allowing for an 8% rejection rate. Budgeted production =100/92x41,400=45,000 units Budgeted direct labour hours = (x 5 hours per unit) 225,000 hours