The total factory overhead for Big Light Company is budgeted for the year at $807,500. Big Light manufactures two different products - night lights and desk lamps. Night lights is budgeted for 60,000 units. Each night light requires 1/2 hour of direct labor. Desk lamps is budgeted for 80,000 units. Each desk lamp requires 2 hours of direct labor. Determine the total number of budgeted direct labor hours for year.

Explanation:

Budgeted direct labor hour is defined as the average time it will take to complete a budgeted production . This is calculated by multiplying the budgeted production by the labor hour per unit of production.

Workings

Total overhead budget = 807,500

Night light budgeted production = 60,000

Desk lamp budgeted production= 80,000

Night lamp production = 1/2 hour / unit

Desk lamp production = 2 hour / unit

Night light budgeted hour = 60000*1/5 = 30,000 hours

Desk lamp budgeted hour  = 80,000 * 2 = 160,000 hours

Total number of budgeted direct labor hours = 190,000 hours

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