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31 March, 04:10

Theresa Corporation, which manufactures baskets, is developing direct labor standards. The basic direct labor rate is $21.00 per hour. Payroll taxes are 9% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance, are $4.00 per hour. What is the standard rate per direct labor hour?

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  1. 31 March, 06:49
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    Standard rate per direct labor hour is $27.1

    Explanation:

    Standard rate per direct labor hour includes the hourly pay rate, Payroll taxes and fringe benefits. For Theresa Corporation,

    We have given that

    Basic direct labor rate is $21.00 per hour

    Payroll Taxes is 10% of basic direct labor rate i. e. 10% of $21.00 = $2.10 per hour

    Fringe Benefits is $4.00 per hour.

    So Standard rate per direct labor hour = $21.00 + $2.10 + $4.00 = $27.1
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