Delaware corp. prepared a master budget that included $21,360 for direct materials, $33,600 for direct labor, $18,000 for variable overhead, and $46,440 for fixed overhead. delaware corp. planned to sell 4,000 units during the period, but actually sold 4,300 units. how much would direct labor cost be on a flexible budget for the period based on actual sales?

Direct labor cost is an example of a variable cost. Variable cost changes directly with the output of the company. In this problem the direct labor cost for 4,000 units is $33,600. Computing, you would get that the direct labor cost per unit ($33,600 / 4,000 units) is $8.4 per unit. Since the problem is looking for the direct labor cost on a flexible budget based on actual sales, you need to compute the direct labor cost based on the 4,300 units sold (actual sales). To compute for the adjusted direct labor cost, you simply need to multiply the direct labor cost per unit with the number of units sold ($8.4 x 4,300 units). You would get the adjusted direct labor cost of $36,120.