Question

Sheridan Company 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 $0.10 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $12.00 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 0.5 hour per unit, and the allowance for rest periods and setup is 0.5 hours and 0.4 hours, respectively. The standard direct labor hours per unit is

Answer 1

$15.90

Step-by-step explanation:

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

Standard direct labor rate per hour = $12.00 + $0.30 + $1.20 + $2.40

Standard direct labor rate per hour = $15.90