PE 22-4A Direct labor cost budget

LifeTyme Publishers Inc. budgeted production of 191,900 diaries in 2014. Each diary requires assembly. Assume that nine minutes are required to assemble each diary. If assembly labor costs $16.00 per hour, determine the direct labor cost budget for 2014.

Answer:


Hours required for assembly: 
Diaries (191,900 × 9 min.)……………………………………………………  1,727,100  min. 
Convert minutes to hours…………………………………………………… ÷   60  min. 
Assembly hours………………………………………………………………  28,785  hrs. 
Hourly rate…………………………………………………………………….…… ×       $16.00 
Total direct labor cost……………………………………………………………  $460,560