Question

Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is .3 pounds and .1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $.10 per pound, and receiving and handling costs are $.07 per pound. The hourly wage rate is $12.00 per hour, but a raise which will average $.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is .2 hours and .1 hours, respectively. The standard direct labor rate per hour is ______

Answer 1

Answer:

The standard direct labor rate per hour is 1.3 hours

Explanation:

For computing the standard direct labor rate per hour, we have to use the equation which is shown below:

= Standard production time + allowance for rest periods + setup time

where,

Standard production time is 1 hour per unit

Allowance for rest period is 0.2 hours

Setup time is 0.1 hours

Now put these values to the above formula

So, the answer would be equal to

= 1 hour per unit + 0.2 hours + 0.1 hours

= 1.3 hours

The other information which is given in the question is irrelevant. Thus, it is ignored and therefore, it is not consider in the computation part.

Hence, The standard direct labor rate per hour is 1.3 hours