Question

Marigold Corp. produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.1 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $8 per hour, but a raise which will average $0.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is 0.2 hours and 0.1 hours, respectively. The standard direct labor rate per hour is

Answer 1

$11.90

Step-by-step explanation:

Standard direct labor rate per hour = Hourly wage rate + Average raise on wage + Payroll taxes + Fringe benefits

Standard direct labor rate per hour = $8 + $0.3 + $1.2 + $2.4

Standard direct labor rate per hour = $11.90.