Answer:
Kouba Corporation
Direct labor budget for April and May:
April May
Production in units 1,700 1,600
Direct labor-hours per unit 0.52 0.52
Total direct labor-hours needed 884 832
Total direct labor-hours paid 960 960
Direct labor rate $9.00 $9.00
Total direct labor cost $8,640 $8,640
Explanation:
a) Data and Calculations:
April May
Production in units 1,700 1,600
Direct labor-hours per unit 0.52 0.52
Total direct labor-hours needed 884 832
Total direct labor-hours paid 960 960
Direct labor rate $9.00 $9.00
Total direct labor cost $8,640 $8,640
Idle hours paid for 76 128
Cost for idle hours $684 $1,152
b) The Kouba Corporation pays its workers for a total of 204 idle hours with a total cost of $1,836 for the two months period. This amount is substantial, about 10% of the total amount paid for the two months.
