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Pooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.73 direct labor-hours. The direct labor rate is $11.60 per direct labor-hour. The production budget calls for producing 6,500 units in April and 6,300 units in May. 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

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facundobuzzetti

Answer:

April= $63,568

May= $63,568

Total cost= $127,136

Explanation:

Giving the following information:

Each unit of output requires 0.73 direct labor-hours.

The direct labor rate is $11.60 per direct labor-hour. T

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.

First, we need to calculate the direct labor hours required for each month.

Direct labor hours:

April= 0.73*6,500= 4,745 hours

May= 0.73*6,300= 4,599 hours

Now, we can calculate the direct labor cost for each month:

Direct labor cost:

April= 11.6*5,480= $63,568

May= 11.6*5,480= $63,568

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