Rapid Rails Company Rapid Rails Company manufactures toy airplanes. Information on Rapid Rails Company's labor costs follow:
The following information applies to the upcoming month of July for Rapid Rails Company:
Refer to Rapid Rails Company. What amount of budgeted labor cost would appear in the July selling, general, and administrative expense budget?

Question

Rapid Rails Company Rapid Rails Company manufactures toy airplanes. Information on Rapid Rails Company's labor costs follow:
 The following information applies to the upcoming month of July for Rapid Rails Company:
 Refer to Rapid Rails Company. What amount of budgeted labor cost would appear in the July selling, general, and administrative expense budget?

Quizplus · Accepted Answer

The budgeted labor cost for July is calculated as follows: 
Regular time labor cost = 800 hours x $15 per hour = $12,000 
Overtime labor cost = 100 hours x $20 per hour = $2,000 
Total labor cost = Regular time labor cost + Overtime labor cost = $12,000 + $2,000 = $14,000 
However, only 90% of the total labor cost is included in the selling, general, and administrative expense budget, as stated in the question, so the budgeted labor cost is: 
$14,000 x 90% = $12,600 
But, there is an additional $800 in salaries, which needs to be added: 
$12,600 + $800 = $13,400 
Therefore, the answer is choice C, $19,800, is incorrect as it is not given anywhere.

Rapid Rails Company Rapid Rails Company Manufactures Toy Airplanes