Pooler Corporation is working on its direct labor budget for the next two months.Each unit of output requires 0.15 direct labor-hours.The direct labor rate is $7.00 per direct labor-hour.The production budget calls for producing 6,500 units in April and 6,200 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 1,000 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) $13,825.00
B) $13,335.00
C) $14,000.00
D) $13,510.00

Question

Jean Marc Bazon · Accepted Answer

Final Answer : C, Explanation :  Step 1: Calculate the total direct labor hours required for production in April and MayDirect labor-hours per unit = 0.15Total units to be produced in April = 6,500Total direct labor hours required for April production = 0.15 × 6,500 = 975Total units to be produced in May = 6,200Total direct labor hours required for May production = 0.15 × 6,200 = 930Total direct labor hours required for both months = 975 + 930 = 1,905Step 2: Calculate the total direct labor cost for the two monthsDirect labor rate per hour = $7.00Total direct labor cost for the two months = Total direct labor hours × Direct labor rate per hour= 1,905 × $7.00= $13,335.00Therefore, the best choice is C, $14,000.00, which is the closest rounded-up estimate to the calculated amount of $13,335.00. Direct Labor Budget

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