Question

Piper​ Corporation, which manufactures dog​ toys, is developing direct labor standards. The basic direct labor rate is $ 12.68$12.68 per hour. Payroll taxes are 1313​% of the basic direct labor​ rate, while fringe benefits such as vacation and health care​ insurance, are $ 7.33$7.33 per hour. What is the standard rate per direct labor​ hour?

A. $ 20.01 B. $ 12.68 C. $ 14.33D. $ 21.66

Answer 1

option (D) $21.66

Step-by-step explanation:

Data provided in the question:

Basic direct labor rate per hour = $12.68

Payroll taxes = 13​% of basic direct labor​ rate

Fringe benefits per hour = $7.33

Now,

The standard rate per direct labor​ hour

= Basic direct labor rate per hour + Payroll taxes + Fringe benefits per hour

= $12.68 + ( 13% of $12.68 ) + $7.33

= $12.68 + $1.6484 + $7.33

= $21.6584 or $21.66

Hence,

The correct answer is option (D) $21.66