Veltri Corporation is working on its direct labor budget for the next two months
ID: 2379664 • Letter: V
Question
Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.72 direct labor-hours. The direct labor rate is $10.50 per direct labor-hour. The production budget calls for producing 7,500 units in October and 7,300 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?
Veltri Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.72 direct labor-hours. The direct labor rate is $10.50 per direct labor-hour. The production budget calls for producing 7,500 units in October and 7,300 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?
Explanation / Answer
Guaranteed monthly hoours for payment to labour work force=5480 hrs
Hence for october & november ,guaranteed hrs =5480hrs*2=10960 hrs
Labour wage rate per hour=$10.50
Hence total combined direct labor cost for the two months=$10.50*10960hrs =$11,5080
Therefore answer is last option -$115,080
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