If the production budget shows that 300 bicycles are to be produced for the month,it takes 1.5 labour hours to produce a bike and labour is paid at $187.50 per 7 1/2 hour day,the budget cost of labour for the month is:

Question

Quizplus · Accepted Answer

To find the budget cost of labour for the month, we need to calculate the total number of labour hours required to produce 300 bicycles and then multiply it by the labour rate.

Labour hours required to produce 1 bicycle = 1.5 hours
Labour hours required to produce 300 bicycles = 1.5 x 300 = 450 hours

Labour rate per day = $187.50
Labour hours worked per day = 7 1/2 hours = 7.5 hours

Labour rate per hour = Labour rate per day / Labour hours worked per day
= $187.50 / 7.5
= $25 per hour

Therefore, budget cost of labour for the month = Labour hours required x Labour rate per hour
= 450 x $25
= $11,250

Hence, the best choice is C, $11,250.

If the Production Budget Shows That 300 Bicycles Are to Be