Webster Corporation is preparing a master budget for the first quarter of the year. The company budgets production of 3,000 units in January, 2,760 units in February and 3,540 units in March. Each unit requires 0.5 hours of direct labor. The direct labor rate is $12 per hour. Compute the budgeted direct labor cost for the first quarter budget.

Budgeted Direct Labor Cost for the first quarter = $ 18000 +16560 + 21240

=  $ 55800

Explanation:

Webster Corporation

Direct Labor Cost Budget

For the First Quarter

                                      January      February      March

Production Budget        3000           2760            3540

Direct Labor Hours        0.5               0.5              0.5

Direct Labor Hours        1500            1380            1770

Direct Labor Cost            $ 12            $ 12             $ 12

Direct Labor Cost           $ 18000      16560          21240    

We multiply the required the no. of hours per unit (0.5) to the monthly units to get the total hours required. The total hours for each month are multiplied with the cost per hour to get the total cost for each month.

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

the correct choice is a