Veltri Corporation is working on its direct labor budget for the next two months
ID: 2346270 • Letter: V
Question
Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.77 direct labor-hours. The direct labor rate is $11.20 per direct labor-hour. The production budget calls for producing 7,100 units in October and 6,900 units in November. 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?A) $122,752.00
B) $120,736.00
C) $120,881.60
D) $122,606.40
Explanation / Answer
October
November
Total
Required production in units
7,100
6,900
Direct labor-hrs per unit
0.77
0.77
Total direct labor-hrs needed
5,467
5,313
Minimum guarabteed paid labor hrs
5,480
5,480
Direct labor cost per hr
61,376
61,376
122,752
October
November
Total
Required production in units
7,100
6,900
Direct labor-hrs per unit
0.77
0.77
Total direct labor-hrs needed
5,467
5,313
Minimum guarabteed paid labor hrs
5,480
5,480
Direct labor cost per hr
61,376
61,376
122,752
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