Veltri Corporation is working on its direct labor budget for the next two months
ID: 2481290 • 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 $10.00 per direct labor-hour. The production budget calls for producing 6,700 units in October and 6,500 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?
$109,600.00
$104,850.00
$115,050.00
$101,640.00
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 $10.00 per direct labor-hour. The production budget calls for producing 6,700 units in October and 6,500 units in November. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 5,480 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months?
Explanation / Answer
Particulars October November No. of units to be produced (1) 6700 6500 Hrs/unit (2) 0.77 0.77 Total Hours worked (3)=(1)*(2) 5159 5005 Min hrs for which wages to be provied 5480 5480 Therefor wages will be provided for (4) 5480 hrs 5480 hrs Labor rate/hr (5)($) $10 $10 Total Wages paid (4)*(5) 54800 54800 Therefor total wages will be $1,09,600($54800+$54800)
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