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Capati Corporation is working on its direct labor budget for the quarter. Each unit of output requires 0.41 direct labor-hours. The direct labor rate is $12.50 per direct labor-hour. The production budget calls for producing 2,300 units in June, 2,350 units in July and 2,800 units in September. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 960 hours in total each month even if there is not enough work to keep them busy.
Required: Using the template
a. Calculate the total direct labor cost for the quarter if the company follows its no lay-off policy, but pays time-and-a-half for every hour worked in excess of 960 hours in a month?
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