Question

the budgeted production of taurus, inc. is 15,000 units per month. each unit requires 30 minutes of direct labor to complete. the direct labor rate is $90 per hour. what is the budgeted cost of direct labor for the month?

Answer 1

From the give information, The budgeted cost of direct labor for the month is $675,000.

Budgeted cost of Direct labor = Budgeted units × hours per unit × Rate per hour = (15000 × 30/60) × $90 = $675,000

• Wages paid in the process of making products or rendering services to customers are referred to as direct labour costs. The entire direct labour cost is far more than the wages received. In addition, it covers the cost of any payroll taxes related to those salaries, as well as any workers' compensation insurance, life insurance, medical insurance, and other benefits provided by the employer.
• In a job costing environment, where production personnel is required to track the time they spend working on different jobs, direct labour expenses are most frequently connected with goods. If workers are involved in a wide range of items, this might become a significant task.

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