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Budgeted production next month is 8200 units. Each unit requires 6 labour hours to make. Labour is paid $15 per hour, and idle time represents 10% of the total time paid. what is the total budgeted labour cost for next month?
Please show me the calculation for this question.
The working time needed is 6 x 8200 = 49200.
Since 10% of time paid is idle, only 90% of time paid is worked.
So the hours paid will be 49200 / 90% = 54667 hours
If you cost out at $15 per hour you get $$820,000
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