Answer:
The monthly labor cost this year=$53,000
Explanation:
<em>Step 1: Determine yearly cost of labor last year</em>
T=C×N
where;
T=total cost of labor last year
C=labor cost per month
N=number of months in a year
In our case;
T=unknown, to be determined
C=$44,000 per month
N=12 months
Replacing;
T=(44,000×12)=$528,000
<em>Step 2: Determine yearly cost of labor this year</em>
This years cost of labor can be expressed as;
Y=T+I
where;
Y=this year's labor cost
T=last years labor cost
I=the increase in cost from last year to this year
In our case;
Y=unknown to be determined
T=$528,000
I=$108,000
Replacing;
Y=(528,000+108,000)=$636,000
<em>Step 3: Determine monthly cost of labor for this year</em>
Monthly labor cost this year=this years labor cost/number of months in a year
where;
Monthly labor cost this year=unknown to be determined
this years labor cost=$636,000
number of months in a year=12
Replacing;
Monthly labor cost this year=(636,000/12)=$53,000
The monthly labor cost this year=$53,000
