UNIT 8 $6,860 ($9,800 X .70) COST OF NEXT 7 UNITS = (8 X $6,860...

57. Correct answer d. The amount that should be budgeted for direct labor is $105,000.

Cost of production = $400,000 - $10,000 + $25,000 = $415,000

Cost of Direct labor + O/H = $415,000 - $100,000 material = $315,000

Cost of Direct labor = $315,000 ÷ 3* = $105,000

*Overhead = 2 x direct labor

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