Question

Ford Corporation is pulling together its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $9.90 per direct labor-hour. The production budget calls for producing 3,800 units in June and 4,300 units in July.Required:Prepare the direct labor budget for the next two months, assuming that the direct labor work force is fully adjusted to the total direct labor-hours needed each month. (Round your answers to 2 decimal places.)Required production in units 3,800 4,300Direct labor-hours per unit 0.05 0.05Total direct labor-hours needed 190 215Direct labor cost per hour $9.90 $9.90Total direct labor cost $1,881.00 $2,128.50

Answer 1

Answer:

$\left[\begin{array}{ccc}-& June& July\\ Units&3,800&4,300\\ Hours per Unit&0.05&0.05\\ Labor Hour&190&215\\ Rate&9.9&9.9\\ Labor Cost&1,881&2,128.5\\\end{array}\right]$

Explanation:

3,800 units

x 0.05 hours per unit

190 labor hous

x $9.90 per hour

$1,881

4,300 units

x 0.05 hours per unit

215 labor hours

x $9.90 per hour

$2,128.5

We first multiply units bythe time it takes to do a single unit,

this will be the total labor hours required for the production

Then we apply the labor rate to get the labor cost.