ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The basic calculation used by the budget is to import the number of units of production from the production budget and to multiply this by the standard number of labor hours for each unit. This yields a subtotal of the direct labor hours needed to meet the production target.

Detailed explanation-2: -Direct labor costs start with a 30, 000 foot view of what you spend on labor. Your goal is to figure out the cost of each hour worked for employee segments. That includes payroll (both salary or hourly), but also overtime and other employee benefits.

Detailed explanation-3: -The production budget is the starting point for preparation of the direct labor cost budget. Standards are designed to evaluate price and quantity variances separately. When budget goals are set too tight, the budget becomes less effective for planning and controlling operations.

Detailed explanation-4: -Wages + taxes + other benefits divided by number of hours worked during the pay period. Units produced divided by labor hours needed. Direct labor hourly rate x direct labor hours. More items