Question

Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct labor requirement per unit is 0.50 hours. Labor is paid at the rate of $21 per hour. The total cost of direct labor budgeted for the month of August is:

Answer 1

See below

Step-by-step explanation:

The budgeted direct labor cost for August can be computed by multiplying the labor rate per hour by the labor hours worked in August.

Assume one unit consumes 0.50 labor hours, the labor hours worked in August are;

Labor hours - August = 0.50 × 8,100 = 4,050 labor hours

Therefore, the labor cost for August are budgeted to be;

Direct labor cost - August = 4,050 × $21 = $85,050