Northwood Manufacturing is planning to sell 650 chairs and produce 600 chairs during July. Each chair requires 3 pounds of wood and 1.5 hours of direct labor. Wood costs $8 per pound and employees of the company are paid $18.00 per hour. Manufacturing overhead is applied at a rate of 90% of direct labor costs. Northwood has 2,000 pounds of wood in the beginning inventory and wants to have 1,500 pounds in the ending inventory. How much is the total amount of budgeted direct labor for July?

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
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Northwood Manufacturing is planning to sell 650 chairs and produce
600 chairs during July. Each chair requires 3 pounds of wood and 1.5
hours of direct labor. Wood costs $8 per pound and employees of the
company are paid $18.00 per hour. Manufacturing overhead is
applied at a rate of 90% of direct labor costs. Northwood has 2,000
pounds of wood in the beginning inventory and wants to have 1,500
pounds in the ending inventory.
How much is the total amount of budgeted direct labor for July?
Transcribed Image Text:Northwood Manufacturing is planning to sell 650 chairs and produce 600 chairs during July. Each chair requires 3 pounds of wood and 1.5 hours of direct labor. Wood costs $8 per pound and employees of the company are paid $18.00 per hour. Manufacturing overhead is applied at a rate of 90% of direct labor costs. Northwood has 2,000 pounds of wood in the beginning inventory and wants to have 1,500 pounds in the ending inventory. How much is the total amount of budgeted direct labor for July?
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