Sky High Company Sky High Company manufactures toy airplanes.Information on Sky High Company's labor costs follow:
$\begin{array}{ll}
\text { Sales commissions } & \$ 5 \text { per plane } \
\text { Administration } & \$ 10,000 \text { per month } \
\text { Indirect factory labor } & \$ 3 \text { per plane } \
\text { Direct factory labor } & \$ 5 \text { per plane }
\end{array}$ The following information applies to the upcoming month of July for Sky High Company:
Budgeted production$~~~~~~~~~$1,200 units
Budget sales$~~~~~~~~~~~~~~~~~~~~$1,000 units Refer to Sky High Company.What amount of budgeted labor cost would appear in the July selling,general,and administrative expense budget?

Question

Quizplus · Accepted Answer

The budgeted labor cost for July can be calculated as follows:
Total direct labor hours = 4,000 + 1,000 = 5,000
Direct labor cost per hour = $15
Total budgeted labor cost = Total direct labor hours x Direct labor cost per hour = 5,000 x $3 = $15,000. Therefore, the option C is the correct answer.

Sky High Company Sky High Company Manufactures Toy Airplanes The Following Information Applies to the Upcoming Month of July