In the Water Sports Company overhead budget problem, if Pontoons require 16 direct labor hours per unit and Speedboats require 24 direct labor hours per unit, with 200 units of each budgeted, what is the total number of budgeted direct labor hours for the year? (A) 400 (B) 1,600 (C) 3,200 (D) 8,000 (E) 4,800

Water Sports Company budgets overhead cost of $840,000 for the year. The company manufactures two types of boats: Pontoons and Speedboats. Budgeted direct labor hours per unit are 16 for the Pontoon m...

Water Sports Company budgets overhead cost of $840,000 for the year. The company manufactures two types of boats: Pontoons and Speedboats. Budgeted direct labor hours per unit are 16 for the Pontoon model and 24 for the Speedboat model. The company budgets production of 200 units of the Pontoon model and 200 units of the Speedboat model for the year.

In the Water Sports Company overhead budget problem, if Pontoons require 16 direct labor hours per u...

Answer

The total budgeted direct labor hours are 8,000 hours, which is option D. Compute $200\times16=3{,}200$ hours for Pontoons and $200\times24=4{,}800$ hours for Speedboats, then add them: $3{,}200+4{,}800=8{,}000$.

Explanation

What you are being asked to total

You need the yearly total direct labor hours (DLH) for both products combined. That means multiplying hours per unit by units planned, for each boat type, then adding.

Direct labor hours for each boat model

Pontoons: $$200\text{ units}\times 16\text{ DLH/unit}=3{,}200\text{ DLH}$$
Speedboats: $$200\text{ units}\times 24\text{ DLH/unit}=4{,}800\text{ DLH}$$

Combine totals and match the multiple-choice option

$$3{,}200+4{,}800=8{,}000\text{ direct labor hours}$$ So the correct answer is D) 8,000 direct labor hours.

Skills You Achive

cost accounting budgeting multiplication resource planning

What you are being asked to total

Direct labor hours for each boat model

Combine totals and match the multiple-choice option

Comments (0)