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Sir, pls help me with the following question-
Budgeted production in a factory for the next period is 4800 units. Each unit requires five labour hours to make. Labour is paid $10 per hour. Idle time represents 20% of total labour time. What is the budgeted total labour cost for the next period?Please don’t just set test questions and expect an answer. You must have an answer in the same book in which you found the question (unless it has been set you as an assignment!), and so you should ask whatever it is in the answer that you are not clear about – then I will try and help.
For every 100 hours paid, 20 hours will be idle and therefore 80 hours are worked.
So for every 80 hours worked they have to pay for 100 hours.
They need 4,800 x 5 hours of work, and so they have to pay for 4,800×5 x 100/80 hours at $10 per hour.
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