Webster Corporation is preparing a master budget for the first quarter of the year. The company budgets production of 2,940 units in January, 2,730 units in February and 3,390 units in March. Each unit requires 0.6 hours of direct labor. The direct labor rate is $12 per hour. Compute the budgeted direct labor cost for the first quarter budget.

65,232

Explanation:

Webster Corporation

Budgeted direct labor cost for quarter

= Total production * hours required * rate

= (2940+2730+3390)*0.6*12

=$9,060*7.2

= 65,232

Budgeted labour cost for the quarter = $60,480

Explanation:

The labour budget shoes the estomated cost of labour hours required to achieve the  production  budget.

Direct labour budget:

Total production for the first quarter =   2,940 + 2,730  +   3,390 =8400 units

The labour budget in hours = Total production unit × standard hour

      = 8400 × 0.6 hours

      = 5040 hours

Total labour budget i ($) =  Total labour hours × rate per hour

                  = 5040 × $12

                  = $60,480

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