F2 Budgeting,Kaplan study text,chapter 13,pg 353.Labour Budgets

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February 21, 2014 at 1:05 pm #159701
eddie247
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A contract cleaning firm estimates that it will take 2,520 actual cleaning hours to clean an office block.Unavoidable interruptions and lost time are estimated to take 10% of the workers time.If the wage rate is $8.50 per hour,the budgeted labour cost will be:
A.$19,278
B.$21,420
C.$23,562
D.$23,800
Could you please kindly show me how u get to the answer to this question.
Thanks
February 21, 2014 at 1:09 pm #159705
John Moffat
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Here is a clue 🙂
For every 11 hours that are paid for, they will lose 10% of the time, and so only work for 10 hours.
Or, to put it the other way round, for every 10 actual cleaning hours, they will need to pay for 11 hours.
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