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16 June, 15:42

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

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  1. 16 June, 17:34
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    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
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