Question

ABC Company's production standards for Product Z indicates that each unit requires 6 hours of direct labor time. Union labor wage rates are currently $24 per hour. ABC's production manager earns a salary of $1,000 per week overseeing all units produced. The standard direct labor cost for Product Z is $_______ per unit.

Answer 1

The standard direct labor cost for Product Z is $144 per unit, obtained by multiplying 6 hours of labor time required for each unit by the $24 hourly wage rate.

Step-by-step explanation:

The standard direct labor cost for Product Z can be calculated by multiplying the number of hours required to produce one unit by the wage rate per hour. The question mentions that each unit of Product Z requires 6 hours of direct labor time at a wage rate of $24 per hour. Therefore, the standard direct labor cost for one unit of Product Z is:

6 hours × $24 per hour = $144 per unit

The production manager's salary is not included in the direct labor cost per unit because it is a fixed cost and does not change with the number of units produced.