Gary is in the furniture business. He observed increasing demand for office chairs and strongly anticipates even better results in the next quarter. Gary decides to reconsider his production plans, and he comes up with the following production budget for the second quarter:

- April: 600 units
- May: 640 units
- June: 700 units

Gary determines that every unit needs 2 hours of direct labor (DL) time. He pays $20 per hour to his daily wage workers.

Considering the given information, which of the following is correct?

1. For the second quarter, total DL hours and total DL cost will be 1200 and $24,000 respectively.
2. For the second quarter, total DL hours and total DL cost will be 1280 and $25,600 respectively.
3. For the second quarter, total DL hours and total DL cost will be 3880 and $77,600 respectively.
4. For the second quarter, total DL hours and total DL cost will be 3940 and $76,400 respectively.

After calculating the overall direct labor hours and costs based on the units to be produced in the second quarter and the hourly wage, the correct answer is option 3, which states that the total DL hours will be 3880 and the total DL cost will be $77,600.

The question is asking to determine the total direct labor (DL) hours and total DL cost for Gary's furniture business, given the production budget for the second quarter and the cost of labor. To find the total DL hours, we need to sum the number of units produced in each month of the quarter and multiply by the 2 hours of DL time required per unit. For the second quarter, Gary plans to produce 600 units in April, 640 units in May, and 700 units in June, totaling 1940 units. Therefore, the total DL hours are 1940 units x 2 hours/unit = 3880 hours. Then, to find the total DL cost, we multiply the total DL hours by the hourly wage of $20/hour. Hence, the total DL cost is 3880 hours x $20/hour = $77,600.

From the given options, the correct one is option 3.

So, Gary's total DL hours for the second quarter are 3880, and the total DL cost will be $77,600. This is a typical calculation in the production planning and budgeting processes for a business.

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