The Direct Labor Budget

At Royal, each unit of product requires 0.05 hours (3 minutes) of direct labor.

The Company has a no layoff policy so all employees will be paid for 40 hours of work each week.

For purposes of our illustration assume that Royal has a no layoff policy, workers are paid at the rate of $10 per hour regardless of the hours worked.

For the next three months, the direct labor workforce will be paid for a minimum of 1,500 hours per month.

prepare the direct labor budget.

		Month
	April	May	June	Quarter 2
Units of production
direct labor per unit
labor hours required
Guaranteed labor hours
Labor hours paid
Hourly wage rate
Total direct labor cost