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 5,480 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?

Question

Boston

Business

31 January, 02:26

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 5,480 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?

+2

Answers (1)

Know the Answer?

Jean · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

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 $10.60 per direct labor-hour. The production budget calls for producing 7,600 units in March and 7,400 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 workforce for at least 5,480 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?

First, we need to calculate the number of hours required:

March = 0.70*7,600 units = 5,320 hours

April = 0.70*7,400 = 5,180 hours

Now, we can calculate the cost of direct labor:

March = 5,480*10.6 = $58,088

April = 5,480*10.6 = $58,088

Total = $116,176