Question

Webster Corporation is preparing a master budget for the first quarter of the year. The company budgets production of 3,000 units in January, 2,760 units in February and 3,540 units in March. Each unit requires 0.5 hours of direct labor. The direct labor rate is $12 per hour. Compute the budgeted direct labor cost for the first quarter budget.

Answer 1

Budgeted Direct Labor Cost for the first quarter = $ 18000 +16560 + 21240

= $ 55800

Step-by-step explanation:

Webster Corporation

Direct Labor Cost Budget

For the First Quarter

January February March

Production Budget 3000 2760 3540

Direct Labor Hours 0.5 0.5 0.5

Direct Labor Hours 1500 1380 1770

Direct Labor Cost $ 12 $ 12 $ 12

Direct Labor Cost $ 18000 16560 21240

We multiply the required the no. of hours per unit (0.5) to the monthly units to get the total hours required. The total hours for each month are multiplied with the cost per hour to get the total cost for each month.