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The Direct Labor Budget At Royal, each unit of product requires 0.05 hours (3 minutes)...

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Accounting

The Direct Labor Budget

At Royal, each unit of product requires 0.05 hours (3 minutes) of direct labor.

The Company has a no layoff policy so all employees will be paid for 40 hours of work each week.

For purposes of our illustration assume that Royal has a no layoff policy, workers are paid at the rate of $10 per hour regardless of the hours worked.

For the next three months, the direct labor workforce will be paid for a minimum of 1,500 hours per month.

prepare the direct labor budget.

Month

April

May

June

Quarter 2

Units of production

direct labor per unit

labor hours required

Guaranteed labor hours

Labor hours paid

Hourly wage rate

Total direct labor cost

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