Flagstaff Company has budgeted production units of 8,200 for July and 8,400 for August. The direct labor requirement per unit is 0.40 hours. Labor is paid at the rate of $22 per hour. The total cost of direct labor budgeted for the month of August is:

The budgeted Direct labor cost for August is $73920

Explanation:

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

As one unit consumes 0.4 Labor Hours. The labor hours worked in August are,

Labor hours- August = 0.4 * 8400 = 3360 Labor Hours

The Labor cost for August are budgeted to be,

Direct Labor Cost- August = 3360 * 22 = $73920

August $73,920

Explanation:

JULY

Budgeted production units $8,200

Labor requirement per unit (hours) 0.40

Total labor hours needed($8,200×0.40) $3,280

Labour rate per hour($3,280×$22)

Labor dollars $72,160

AUGUST

Budgeted production units $8,400

Labor requirement per unit (hours) 0.40

Total labor hours needed($8,400×0.40) $3,360

Labour rate per hour($3,360×$22)

Labor dollars $73,920

Therefore the total cost of direct labor budgeted for the month of August is: $73,920

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