Milano Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.50 direct labor-hours. The direct labor rate is $9.80 per direct labor-hour. The production budget calls for producing 6,400 units in October and 6,300 units in November. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months

$62,230

Explanation:

The computation of the total combined direct labor cost for the two months is presented below:

   Particulars                                       October          November

A. Budgeted units to be produced     6,400 units   6,300 units

B. Direct labor hour per unit                0.50                   0.50

C. Direct labor rate per hour               $9.80           $9.80

D. Direct labor cost for the month (A × B × C)

                                                             $31,360           $30,870

Therefore the total combined direct labor cost is

= $31,360 + $30,870

= $62,230

We simply multiplied the number of units produced with the direct labor per unit and the direct labor rate per hour so that the direct labor cost could arrive

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