Answer: a. 6.9 hours
b. $20.30
c. $140.07
d. $127.89
Step-by-step explanation:
Actual time spent = 5 hours
Hourly wage rate $14
Payroll taxes = 20% of wage rate = 0.2 × $14 = $2.80
Setup and downtime = 8% of actual labor time = 8% × 5hours = 0.4 hours
Cleanup and rest periods = 30% of actual labor time = 30% × 5 hours = 1.5hours
Fringe benefits 25% of wage rate = 25% × $14 = $3.50
a. Determine the standard direct labor hours per brake repairs.
Actual time spent = 5 hours
Add: Setup and downtime = 0.4 hours
Add: Cleanup and rest periods = 1.5hours
Standard direct labor hours per brake repairs = 6.9 hours
b. Determine the standard direct labor hourly rate.
Hourly wage rate $14
Add: Payroll taxes = $2.80
Add: Fringe benefits = $3.50
Standard direct labor hourly rate = $20.30
c. Determine the standard direct labor cost per brake repair.
= Standard direct labor hours per brake repair × Standard direct labor hourly rate
= 6.9 × $20.30
= $140.07
d. If a brake repair took 3.60 hours at the standard hourly rate, what was the direct labor quantity variance?
First, we calculate the difference between the standard direct labor hours per brake repair and the Actual direct labor hours which will be:
= 6.9hours - 3.6 hours
= 6.3 hours
We then multiply 6.3 hours by the standard direct labor hourly rate. This will be:
= 6.3 × $20.30
= $127.89