Question

For July, White Corporation has budgeted production of 10,950 units. Each unit requires 0.20 direct labor-hours at a cost of $6.20 per direct labor-hour. How much will White Corporation budget for labor in July?

Answer 1

Answer: $13,578

Explanation:

Each unit requires 0.2 direct labour hours to complete. There are 10,950 units to be produced.

Calculating the amount of labor hours needed would therefore be,

= 10,950 * 0.2

= 2,190 labor hours would be needed.

If labor costs $6.20 per direct labor hour and 2,190 hours are needed, calculating would be,

= 2,190 * 6.2

= $13,578

$13,578 should be budgeted for labor in July.

Answer 2

Answer:

$13,578

Explanation:

The budget for labor in the month is a function of the number of units to be produced in the month as well as the cost of labor hour and the number of hours required to produce the desired number of units.

To get the total number of hour required,

If it takes 0.2 direct labor-hours to produce a unit then, to produce 10,950 units, direct labor-hours required

=  10950 * 0.2

= 2190 direct labor-hours

White Corporation budget for labor in July

= 2190 * $6.20

= $13,578