Lethbridge Company Constructed the Following Formula for Monthly Utility Cost

question 102

Multiple Choice

Lethbridge Company constructed the following formula for monthly utility cost.
Total utility cost = $1,400 + ($10.10 × labour hours)
Assume that 800 labour hours are budgeted for the month of May.
-Refer to the Figure.If Lethbridge Company incurs 9,600 labour hours for the year,what would be the estimate of total utility cost?

• A)$96,960
• B)$98,360
• C)$113,760
• D)$120,960

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Definitions:

Inventory Items

Goods or materials a company holds for the ultimate purpose of resale.

FIFO Cost Flow

A method of inventory valuation where goods purchased first are the ones sold first, hence, the inventory left consists of the most recently purchased or produced goods.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold by a company, including materials and labor costs.

Inventory Items

are goods or products that a business holds for the purpose of sale or production.