Question

Piper​ Corporation, which manufactures dog​ toys, is developing direct labor standards. The basic direct labor rate is​ $12.00 per hour. Payroll taxes are​ 13% of the basic direct labor​ rate, while fringe benefits such as vacation and health care​ insurance, are​$6.00 per hour. What is the standard rate per direct labor​hour?

A ​$13.56 B.​$18.00 C.​$12.00 D.​$19.56

Answer 1

D.​$19.56

Step-by-step explanation:

The computation of the standard rate per direct labor hour is shown below:

= Basic direct labor rate + payroll tax rate percentage × Basic direct labor rate + fringe benefits per hour

= $12 + $12 × 13% + $6

= $12 + $1.56 + $6

= $19.56

We simply added the basic direct labor rate + payroll tax rate + fringe benefits per hour so that the correct rate per direct labor hour can come