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Company X is preparing the direct labor budget for the month of March. The company estimates total production of 150,000 units. Each unit requires 0.1 direct labor hours to produce. The company pays $12 per direct labor hour. The company has no lay-off policy. Hence, it guarantees a minimum of 20,000 direct labor hours to be paid every month. How much is the direct labor cost for the month of March? O a. $200,000 Ob. $240,000 Oc. $220,000 O d. None of the given answers O e. $180,000

Company X is preparing the direct labor budget for the month of March. The company estimates total production of 150,000 units. Each unit requires 0.1 direct labor hours to produce. The company pays $12 per direct labor hour. The company has no lay-off policy. Hence, it guarantees a minimum of 20,000 direct labor hours to be paid every month. How much is the direct labor cost for the month of March? O a. $200,000 Ob. $240,000 Oc. $220,000 O d. None of the given answers O e. $180,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Company X is preparing the direct labor budget for the month of March. The company estimates total production of 150,000 units. Each unit requires 0.1 direct labor hours to produce. The company pays $12 per direct labor hour. The company has no lay-off policy. Hence, it guarantees a minimum of 20,000 direct labor hours to be paid every month. How much is the direct labor cost for the month of March? O a. $200,000 O b. $240,000 O c. $220,000 O d. None of the given answers O e. $180,000
Transcribed Image Text:Company X is preparing the direct labor budget for the month of March. The company estimates total production of 150,000 units. Each unit requires 0.1 direct labor hours to produce. The company pays $12 per direct labor hour. The company has no lay-off policy. Hence, it guarantees a minimum of 20,000 direct labor hours to be paid every month. How much is the direct labor cost for the month of March? O a. $200,000 O b. $240,000 O c. $220,000 O d. None of the given answers O e. $180,000
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