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In: Accounting

Jaybird Inc. produces leather handbags. The sales budget for the next four months is: July 5,600...

Jaybird Inc. produces leather handbags. The sales budget for the next four months is: July 5,600 units, August 7,800, September 8,300, October 8,100. Jaybird Inc.’s ending finished goods inventory policy is 10% of the following month’s sales. Each handbag requires 1.6 hours of unskilled labor (paid $15 per hour) and 2.2 hours of skilled labor (paid $22 per hour). What will be the total labor cost for the month of August?

Multiple Choice

  • $568,340

  • $29,830

  • $566,170

  • $488,050

Solutions

Expert Solution

Option A
Total Labour Cost for the month of August is $ 5,68,340
Month Sales Budget Closing stock Opening Stock Actual Units For each months Unskilled Labour @ 15/hr. Skilled Labour @ 22/hr. Total Labour cost
July                 5,600                     780                         560                     5,820        1,39,680        2,81,688        4,21,368
August                 7,800                     830                         780                     7,850        1,88,400        3,79,940        5,68,340
September                 8,300                     810                         830                     8,280        1,98,720        4,00,752        5,99,472
October                 8,100

ekkarill92 answered 2 years ago
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