The production budget for Manner Company shows units to be produced as follows:

Question

The production budget for Manner Company shows units to be produced as follows: July, 660; August, 720; and September, 580. Each unit produced requires one hour of direct labor. The direct labor rate is currently $16 per hour but is predicted to be $16.75 per hour in September.

Prepare a direct labor budget for the months July, August, and September.

MANNER COMPANY Direct Labor Budget For July, August, and September July August September Budgeted production (units) 660 720 580 units Total labor hours needed Budgeted direct labor cost

Explanation / Answer

The correct answer is :

Note :

1. Total labor hours needed = Budgeted production (units) * Direct Labor Hours required per unit

2. Budgeted direct labor cost =  Total labor hours needed * direct labor rate per hour

MANNER COMPANY Direct Labor Budget For July, August, and September July August September Budgeted production (units) 660 720 580 units Direct Labor Hours required per unit 1 1 1 hour Total labor hours needed 660 720 580 Hours direct labor rate per hour 16 16 16.75 per hour Budgeted direct labor cost 10,560 11,520 9,715

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