Jaybird Inc.produces leather handbags.The sales budget for the next four months is: July 5,000 units,August 7,000,September 7,500,October 8,000.Jaybird Inc.'s ending finished goods inventory policy is 10% of the following month's sales.Each handbag requires 1.3 hours of unskilled labor (paid $8 per hour)and 2.2 hours of skilled labor (paid $15 per hour).How much is total labor cost during the three months July through September?

Question

Quizplus · Accepted Answer

To calculate the total labor cost, first determine the production needs for each month, considering the ending inventory policy. Then, calculate the labor hours required and multiply by the respective labor rates. The total labor cost for July through September is $859,320.