Determine the number of hours of direct labor required per $3000 worth of raw materials: Labor hours per $ 3000 = 4.5 hours Labor hours per $3000=4.5hours Find the number of $3000 increments in the total raw material cost: Number of $ 3000 increments = Total raw material cost $ 3000 Number of $3000 increments= $3000 Total raw material cost  Number of $ 3000 increments = $ 150 , 500 $ 3000 = 50.167 Number of $3000 increments= $3000 $150,500  =50.167 Since you cannot have a fraction of an increment, round up to the nearest whole number. Number of $ 3000 increments = 51 Number of $3000 increments=51 Calculate the total direct labor hours required: Total labor hours = Number of $ 3000 increments  Labor hours per $ 3000 Total labor hours=Number of $3000 increments Labor hours per $3000 Total labor hours = 51  4.5 = 229.5 hours Total labor hours=514.5=229.5hours Determine the budgeted amount for labor: Budgeted labor cost = Total labor hours  Hourly rate Budgeted labor cost=Total labor hours Hourly rate Budgeted labor cost = 229.5 hours  $ 27.50 / hour Budgeted labor cost=229.5hours$27.50/hour Now, calculate the budgeted labor cost: Budgeted labor cost