Asadena Candle Inc. budgeted production of 785,000 candles for January. Each candle requires molding. Assume that six minutes are required to mold each candle. If molding labor costs $18 per hour, determine the direct labor cost budget for January.

$1,413,000

Explanation:

Asadena Candle Inc

Estimated Direct Labor Cost Budget for January

Hours required for manufacturing:

Candles (in minutes) =785,000x6

=4,710,000 minutes

Convert 4,710,000 minutes to hours (60mins)

Manufacturing Hours = 4710000/60

Manufacturing Hours =78,500 hours

Hourly rate $18

Total direct labor cost= manufacturing hours x hourly rates

=78500x18

Total direct labor cost= $1,413,000

It will cost Asadena Candle Inc $1,413,000 to produce 785,000 candles.

Direct labor cost budget is 1,413,000

Explanation:

To get the direct labor cost budget for January first we have to get the direct cost per unit.

Direct cost per unit= direct labor hourly rate * the number of direct labor hours required to complete one unit.

Direct labor hourly rate= $18

The number of direct labor hours required to complete one unit= If we spend 6 minutes for each candle and 1 hour is 60 minutes. So, we use 1/10 of an hour to get 1 candle.

Direct cost per unit= $18 * 1/10=$1.8

The production for January is 785,000 candles.

Then, direct labor cost budget for January is the production multiplied by the direct cost per unit.

Direct labor cost budget=785,000*$1.8=1,413,000

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