Question

A company is setting its direct materials and direct labor standards for its leading product. basic wages of the assembly line personnel are $19 per hour. payroll taxes are approximately 23% of wages. how much is the direct labor cost standard per hour? (round your answer to the nearest cent.)

Answer 1

The direct labor cost standard per hour would simply be the sum of the basic wage and the corresponding income tax. Therefore,

direct labor cost standard per hour = $19 + 0.23 * $19

direct labor cost standard per hour = $23.37 = $23.4