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A company manufactures a single product M. Budgeted production output is 200 units. Each unit of M requires labour hours for completion and the company anticipates 20 per cent idle time. Labour is paid at a rate of $7 per hour. What is the direct labour cost budget?
Solution
200 x 6= 1200
1200/0.8 = 1500
1500 x 7 = 10500Is it correct Sir? I did it right ? Sorry for bothering you, I know it’s an easy one! I got a test & I don’t have the answer. Thank you.
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