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Direct Labor/Equivalent Units calculation

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Looker Hats is planning to sell 600 felt hats, and 700 will be produced during June. Each hat requires ½ yard of felt and ¼ hour of direct labor. Felt costs $3.00 per yard and employees of the company are paid $20 per hour. How much is the total amount of budgeted direct labor for June?
a. $3,000
b. $48,000
c. $3,500
d. $2,400

Given the following data, compute equivalent units of production for conversion costs:
Beginning Work in Process?8,000 units, 40% complete
Units Completed and Transferred Out?80,000 units
Ending Work in Process?6,000 units, 20% complete.

a. 78,000
b. 81,200
c. 84,400
d. 86,000

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Solution Summary

The solution has two problems. In the first it explains how to calculate the budgeted direct labor amount and in the second one it explains how to calculate equivalent units of production under process costing.

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Looker Hats is planning to sell 600 felt hats, and 700 will be produced during June. Each hat requires ½ yard of felt and ¼ hour of direct labor. Felt costs $3.00 per yard and employees of the company are paid $20 per hour. How much is the total amount of budgeted direct labor for June?
a. $3,000 ...

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