Question

Grewett Publishers Inc. budgeted production of 54,000 diaries in 2016. Each diary requires assembly. Assume that five minutes are required to assemble each diary.

If assembly labor costs $13.75 per hour, determine the direct labor cost budget for 2016. Do not round your intermediate calculations but, if required, round your final answer to the nearest dollar.

Answer 1

Correct Answer :

The direct labour cost budget for 2016 is $ 61875.

Working:

A	budgeted production	54000	units
B	assembly time required by each unit	5	minutes
C	assembly cost per hour	$           13.75	dollar
D = A*B	total assembly time in minutes	270000	minutes
E = D/60	total assembly time in hours	4500	hours
F = E*C	total direct labour cost budget	$   61,875.00	dollars

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