Capati Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.41 direct labor hours. The direct labor rate is $8.50 per direct labor hour. The production budget calls for producing 2,300 units in August and 2,200 units in September. 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 960 hours in total each month even if there is not enough work to keep them busy.<?xml:namespace prefix = o ns = “urn:schemas microsoft com:office:office” />
Required: Construct the direct labor budget for the next two months.
August September Required production in units Direct labor hours per unit Total direct labor hours needed Total direct labor hours paid Direct labor cost per hour $ $ Total direct labor cost $ $
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