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JK has budgeted sales for next year of 24,000 units and inventory levels are expected to remain constant throughout the year. Each unit produced will require 3 labour hours and the budgeted labour rate will be £15 per hour. It is estimated that 10% of units produced will be wasted.
It is expected that 85% of the total hours worked will be paid at the basic rates. 10% of the total hours will be paid at the basic rate plus an overtime premium of 50% of the basic rate. 5% of the total hours will be paid at basic rate plus an overtime premium of 100% of the basic rate.
Problem 1: The labour cost budget for next year is:
Select one:
A. £ 1,350,000
B. £ 1,306,800
C. £ 1,188,000
D. £ 1,320,000
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