Forty Winks Corporation manufactures night stands. The production budget shows that Forty Winks Corporation plans to produce 1 comma 400 night stands in March and 1 comma 500 night stands in April. Each night stand requires 0.25 direct labor hours in its production. Forty Winks Corporation has a direct labor rate of $ 14.00 per direct labor hour. What is the total combined direct labor cost that Forty Winks Corporation should budget in March and April?

Budgeted direct labor cost = $10,150

Explanation:

Giving the following information:

Production:

March = 1,400 units

April = 1,500 units

Each nightstand requires 0.25 direct labor hours in its production. Direct labor rate of $ 14.00 per direct labor hour.

To calculate the production budget cost for direct labor, we need to use the following formula:

Direct labor cost = total direct labor hours*direct labor rate

March:

Direct labor hours = 0.25*1,400 = 350 hours

April:

Direct labor hours = 0.25*1,500 = 375 hours

Budgeted direct labor cost = (350 + 375) * 14 = $10,150