For July, White Corporation has budgeted production of 6,000 units. Each unit requires 0.10 direct labor-hours at a cost of $8.50 per direct

For July, White Corporation has budgeted production of 6,000 units. Each unit requires 0.10 direct labor-hours at a cost of $8.50 per direct labor-hour. How much will White Corporation budget for labor in July?

a.$51,000
b.$5,160
c.$600
d.$5,100

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  1. Answer:

    d) $5100

    Explanation:

    Simply calculate per unit labor cost.

    This can be done as follows

    Per unit labor cost = hours used by unit * per hour rate

    So,     Cost = 0.1 * 8.50 =  $0.85/ labor cost per unit produced.

    Now multiply per unit cost with total units budgeted

    Total Labor budget = 6000 * 0.85  =  $5,100

    Hope that helps.

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