Question

Labor data for making one gallon of finished product in Bing Company are as follows. (1) Price—hourly wage rate $18.00, payroll taxes $0.50, and fringe benefits $1.30. (2) Quantity—actual production time 1.60 hours, rest periods and cleanup 0.30 hours, and setup and downtime 0.20 hours.

Compute the following. (Round answers to 2 decimal places, e.g. 1.25.)

Labor data for making one gallon of finished product in Bing Company are as follows. (1) Price—hourly wage rate $18.00, payroll taxes $0.50, and fringe benefits $1.30. (2) Quantity—actual production time 1.60 hours, rest periods and cleanup 0.30 hours, and setup and downtime 0.20 hours.

Compute the following. (Round answers to 2 decimal places, e.g. 1.25.)

(a)		Standard direct labor rate per hour.		$enter a dollar amount rounded to 2 decimal places
(b)		Standard direct labor hours per gallon.		Enter a number of hours rounded to 2 decimal places	hours
(c)		Standard labor cost per gallon.		$enter a dollar amount rounded to 2 decimal places

Answer 1

Answer
Particulars	Calculation
Standard direct labor rate per hour	Hourly wage rate + Payroll taxes + Fringe benefits
	= $18 + $0.50 + $1.30
	= $19.8
Standard direct labor hours per gallon	Actual production time + Rest period and cleanup + Setup and downtime
	= 1.60 + 0.30 + 0.20
	= 2.10
Standard labor cost per gallon	Standard direct labor rate per hour*Standard direct labor hours per gallon
	= $19.8 * 2.10
	= $ 41.58