Question

Morie Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.70 direct labor-hours. The direct labor rate is $9.60 per direct labor-hour. The production budget calls for producing 1,980 units in March and 2,200 units in April. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 1,760 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months?

$31,686.00

$31,402.50

$33,792.00

$33,508.50

Answer 1

Normal work force in a month : 1,760 hours for which morie corporartion would pay even if no enough work.

Units to be produced in March : 1,980

Labour hour requires : 0.7/ unit

So. total labour hour requires : 1,980 * 0.7 = 1,386

So, Paid hours would be 1,760 hours for March.

Units to be produced in April : 2,200

Labour hour requires : 0.7/ unit

So. total labour hour requires : 2,200 * 0.7 = 1,540

So, Paid hours would be 1,760 hours for March.

Total labour cost = (1760+1760) * $ 9.6 = $ 33,792.00