Exercise 7-7 Manufacturing: Direct labor and factory overhead budgets LO P1 Addison Co. budgets production of 2,770 units during the second quarter. Other information is as follows: Each finished unit requires 4 direct labor hours, at a cost of $9 per Direct labor hour. Variable overhead Applied at the rate of $11 per direct labor hour. Fixed overhead Budgeted at $560,000 per quarter 1, pare a direct labor budget. ADDISON CO Direct Labor Budget Second Quarter 2,770 units Units to be produced Total labor hours needed Labor dollars