In companies that do not have "no lay-off" policies, the total direct labor cost for a budget period is computed by multiplying the total direct labor hours needed to make the budgeted output of completed units by the direct labor wage rate. a. True b. False

Business · High School · Sun Jan 24 2021

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The statement is b. False.


In companies that do not have "no lay-off" policies, the total direct labor cost for a budget period is not solely computed by multiplying the total direct labor hours needed by the direct labor wage rate. This is because when there are layoffs, the total direct labor hours may be less than initially anticipated. In such cases, the total direct labor cost is typically adjusted to account for the reduced workforce and the corresponding decrease in labor hours.

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