Labor data for making one gallon of finished product in Bing Company are as follows. (1) Price—hourly wage rate $13.10, payroll taxes $0.72, and fringe benefits $1.44. (2) Quantity—actual production time 1.54 hours, rest periods and cleanup 0.28 hours, and setup and downtime 0.22 hours. Compute the following. (Round answers to 2 decimal places, e.g. 1.25.) (a) Standard direct labor rate per hour. $ (b) Standard direct labor hours per gallon. hours (c) Standard labor cost per gallon. $

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andromache andromache · Answer 1 · 2019-12-09T09:12:59+01:00

Answer:

a. $15.26

b. 2.04 hours

c. $31.33

Explanation:

The computations are shown below:

a. For Standard direct labor rate per hour:

= Hourly wage rate + payroll taxes + fringe benefits

= $13.10 + $0.72 + $1.44

= $15.26

b. For Standard direct labor hours per gallon:

= Actual production time + rest periods and cleanup + setup and downtime

= 1.54 hours + 0.28 hours + 0.22 hours

= 2.04 hours

c. For Standard labor cost per gallon:

= Standard direct labor rate per hour × Standard direct labor hours per gallon

= $15.26 × 2.04 hours

= $31.33