Veltri Corporation is working on its direct labor budget for the next two months
ID: 2475664 • 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 $10.10 per direct labor-hour. The production budget calls for producing 6,900 units in October and 6,700 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?
rev: 11_13_2014_QC_58907
$105,767.20
$110,696.00
$107,453.90
$119,775.90
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 $10.10 per direct labor-hour. The production budget calls for producing 6,900 units in October and 6,700 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
So answer will be option b as in above case minimum hours to be paid is more than actual hours
October November Production Budget 6900 Units 6700 Units Direct Labot hour 5313 5159 ( at 0.77 labor hour per unit) Minimum Hours to be paid 5480 5480 Labor cost at minimum Hours 55348 55348 Total Labor cost for 2 months 110696Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.