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Deep Valley Foods manufactures a product that is first smoked and then packed for shipment...

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Accounting

Deep Valley Foods manufactures a product that is first smoked and then packed for shipment to customers. During a normal month the products direct labor cost per pound is budgeted using the following information.

Direct Labor Hours (per pound) Budgeted Direct Labor Cost (per hour)
Process:
Smoking 0.08 $20
Packing 0.06 12

The budget for March calls for the production of 500,000 pounds of product. However, Marchs direct labor costs for smoking are expected to be 5 percent above normal due to anticipated scheduling inefficiencies. Yet direct labor costs in the packing room are expected to be 4 percent below normal because of changes in equipment layout.

Prepare a budget for direct labor costs in March using three column headings: Total, Smoking, and Packing.

DEEP VALLEY FOODS Budget for Direct Labor Costs For the Month Ended March 31st
Total Smoking Packing
Smoking
Packing
Totals

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