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Erics Manufacturing Limited has provided you with the following information:
- Units to be produced: July 10,000; August 15,000; September 8,000
- Each unit requires .5 direct labour hours and the direct labour rate is $20/hour.
- The company has a no lay off policy so all employees are paid for 40 hours per week
- In exchange for the no layoff policy, workers agree to a wage rate of $20 per hour regardless of the hours worked (no overtime pay).
- For the next three months, the direct labour workforce will be paid for a minimum of 5,000 hours per month
Required: Prepare the direct labour budget for July, August & September 2021 for Erics Manufacturing Limited.
The following is a partial template for the direct labour budget:
| | July | August | September | Quarter |
| Units to be produced | | | | |
| Direct labour per unit | | | | |
| Total direct labour hours needed | | | | |
| | | | | |
| | | | | |
| Direct labour cost per hour | | | | |
| Total direct labour cost | | | | |
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