Question

Nifty Nail Salon Limited is trying to determine the standard labour cost of a manicure. The following data has been collected after analyzing one month's work:

actual time spent on a manicure 1 hour;
hourly wage rate $12;
payroll taxes 7% of wage rate;
set-up and downtime 7% of actual labour time;
cleanup and rest periods 12% of actual labour time.
Determine the standard direct labour hours per manicure.
a) 0.98 hours
b) 1.07 hours
c) 1.12 hours
d) 1.22 hours

Answer 1

The standard direct labor hours per manicure for Nifty Nail Salon Limited, after accounting for set-up/downtime and cleanup/rest periods calculated as a percentage of the actual time spent, amounts to 1.19 hours. The closest matching answer provided in the question is 1.22 hours, which could account for any underestimation.

Step-by-step explanation:

To determine the standard direct labor hours per manicure for Nifty Nail Salon Limited, we need to account for the actual time spent on a manicure, and additionally adjust for the set-up/downtime and cleanup/rest periods as a percentage of the actual labor time. The actual time spent on a manicure is given as 1 hour. The set-up/downtime is calculated as 7% of this time, and cleanup/rest time is an additional 12%.

To find the total percentage of time added for set-up/downtime and cleanup/rest periods, we add 7% + 12% = 19%. To find the additional time, we calculate 19% of 1 hour, which is 0.19 hours. Therefore, we add this to the actual time of 1 hour to obtain the standard labor hours per manicure: 1 hour + 0.19 hours = 1.19 hours.

However, looking at the options provided in the question, none match this exact figure, suggesting a potential mistake in the calculations, misinterpretation of the question, or possible typographical error in the question options. In a real-world scenario, you would typically round up to ensure you cover the costs of labor, so the closest option to our calculation is 1.22 hours, which would be a conservative estimation to insure against any underestimation of the actual time required.