Question

Sweet Charity Company produces boxes of candy products by the gross (candy canes and lollipops). During September, sales in units were projected to be 20,000 and production was projected to be 14,000 units. Direct labor rate is $8.50 per hour, and each unit takes 0.75 hours of direct labor to make. What is the total cost of direct labor for September?

Answer 1

Answer:

$83,300 Labor cost

Explanation:

The sales will generate COGS

while the labor cost is a component of cost of goods manufactured, along with materials an overhead.

The factory employees are paid for their hours into production, the sales are irrelevant.

$units \: produced \times hours \: per \: units \times labor \: rate = Labor \: Cost$

14,000 units produced x 0.75 hour per unit x $8.50 = 83,300