Question

Webster Corporation is preparing a master budget for the first quarter. The company budgets production of 2,980 units in January, 2,750 units in February and 3,490 units in March. Each unit requires 0.7 hours of direct labor. The direct labor rate is $14 per hour. Compute the budgeted direct labor cost for the first quarter budget.

Answer 1

Total direct labor cost= $90,356

Step-by-step explanation:

First, we need to determine the total direct labor hour for each month:

January= 2,980*0.7= 2,086

February= 2,750*0.7= 1,925

March= 3,490*0.7= 2,443

Total direct labor hours= 6,454

Now, the direct labor cost for the first quarter:

Total direct labor cost= 14*6,454

Total direct labor cost= $90,356