It takes a lawyer 120 minutes to serve one customer. Demand is 2 customers per eight-hour day. The lawyer has a wage rate of $200 per hour. What is the cost of direct labor for the lawyer expressed in $ per customer

$800 per customer

Explanation:

As demand is two customers per eight-hour day, one customer comes in 4 hours interval.

However, the lawyer takes 120 minutes or 2 hours to serve a customer. Although he takes 2 hours to serve one customer, he will receive eight-hours wages because of his efforts.

The cost of direct labor for the lawyer in one hour = $200 per customer

The cost of direct labor for the lawyer in four-hour = ($200 × 4 hours) per customer

= $800 per customer.

He will receive 4 hours of wages as the customers come in after 4 hours.