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Haskins Company employs material handling employees who move materials between production divisions at a labor cost of $185,000 a year. It is estimated that these employees move 500,000 pounds of material per year. If 65,000 pounds are moved in March, how much of the material handling cost should be assigned to products made in March

Respuesta :

Material handling cost assigned to products made in march = $24,050

What does Labor cost mean?

  • Labor costs represent the total expenditure incurred by employers for the employment of employees. They represent the cost of the salaried labor force, which is why they are sometimes referred to as salary costs.
  • Labor Cost per pound of material = Labor cost ÷ Number of pounds of material.

∴ Given,

Labor Cost = $185,000

No. of pounds of material moved = 500,000 pounds per year

Now, Labor cost per pound of material = 185,000 ÷ 500,000

                                                                 = $0.37 per pound of material

Therefore, If 65000 pounds are moved in March, Material handling cost

                                                                 = $0.37 × 65,000 pounds

                                                                 = $24,050

Hence, $24050 is the cost of handling for March.

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