Question

Daughdrill Corporation is developing direct labor standards. The basic direct labor wage rate is $10.95 per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $4.00 per direct labor-hour. The standard rate per direct labor-hour should be

Answer 1

Answer:

Standard rate per direct labor-hour = $15.9355

Explanation:

Given:

labor wage = $10.95 per hour

Employment tax rate = 9%

Fringe benefit = $4.00 per-hour

Standard rate per direct labor-hour = ?

Computation of standard rate per direct labor-hour:

Employment tax = labor wage × Employment tax rate

Employment tax = $10.95 per hour × 9%

Employment tax = $10.95 × 0.09

Employment tax = $0.9855

Standard rate per direct labor-hour = labor wage + Employment tax + Fringe benefit

Standard rate per direct labor-hour = $10.95 + $0.9855 + $4.00

Standard rate per direct labor-hour = $15.9355