Brummitt Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.05 direct labor-hours. The direct labor rate is $7.50 per direct labor-hour. The production budget calls for producing 9,100 units in May and 8,800 units in June. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?

Question

Quizplus · Accepted Answer

To calculate the total direct labor cost for the two months, we need to first calculate the total direct labor-hours needed for each month and then multiply it by the direct labor rate.

For May:
Direct labor-hours needed = 0.05 x 9,100 = 455
Direct labor cost for May = 455 x $7.50 = $3,412.50

For June:
Direct labor-hours needed = 0.05 x 8,800 = 440
Direct labor cost for June = 440 x $7.50 = $3,300

Total direct labor cost for the two months = $3,412.50 + $3,300 = $6,712.50

Therefore, the best choice is C, $6,712.50.

Brummitt Corporation Is Working on Its Direct Labor Budget for the Next