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.)

Answer 1

`\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]`

Step-by-step explanation:

`\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]`

We multiply the required units by the time per units

That way we obtain the labour hours

Next we multiply by the labor rate, giving us the labor cost.

Key -terms

labor rate: the total cost of an employee per hour

labor hours: 1 hours of work from an employee