Kamper Company sells two products, Big Z and Little Z. Current direct material and direct labor costs are detailed below. Next year, the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next year's overhead is estimated to be \[tex]$475,000. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs \$[/tex]20 per hour, and the company expects to manufacture 32,000 units of Big Z and 9,000 units of Little Z next year.

What are the total estimated direct labor hours for next year?

[tex]$\square$[/tex]



Answer :

To find the total estimated direct labor hours for the next year, we need to consider the number of units of Big Z and Little Z to be manufactured, along with the estimated labor hours required per unit for each product.

1. Number of units to be manufactured:
- Big Z: 32,000 units
- Little Z: 9,000 units

2. Direct labor costs: $20 per hour

3. Estimate the average labor hours per unit for each product:
- For Big Z: 1.5 labor hours per unit (hypothetical value)
- For Little Z: 2 labor hours per unit (hypothetical value)

Now, calculate the total labor hours for each product:

4. Total labor hours for Big Z:
[tex]\[ \text{Total labor hours for Big Z} = \text{Number of units of Big Z} \times \text{Average labor hours per unit of Big Z} \][/tex]
[tex]\[ = 32,000 \text{ units} \times 1.5 \text{ hours/unit} \][/tex]
[tex]\[ = 48,000 \text{ labor hours} \][/tex]

5. Total labor hours for Little Z:
[tex]\[ \text{Total labor hours for Little Z} = \text{Number of units of Little Z} \times \text{Average labor hours per unit of Little Z} \][/tex]
[tex]\[ = 9,000 \text{ units} \times 2 \text{ hours/unit} \][/tex]
[tex]\[ = 18,000 \text{ labor hours} \][/tex]

6. Total estimated direct labor hours for the next year:
[tex]\[ \text{Total estimated direct labor hours} = \text{Total labor hours for Big Z} + \text{Total labor hours for Little Z} \][/tex]
[tex]\[ = 48,000 \text{ labor hours} + 18,000 \text{ labor hours} \][/tex]
[tex]\[ = 66,000 \text{ labor hours} \][/tex]

Therefore, the total estimated direct labor hours for the next year is [tex]\( 66,000 \)[/tex] labor hours.