Question

Piper Corporation, which manufactures dog toys, is developing direct labor standards. The basic direct labor rate is $12.00 per hour. Payroll taxes are 13% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance, are $6.00 per hour. What is the standard rate per direct labor hour?

Answer 1

Total= $19.56

Step-by-step explanation:

Giving the following information:

The basic direct labor rate is $12.00 per hour. Payroll taxes are 13% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance, are $6.00 per hour.

The direct labor standard rate per hour is calculated using the direct labor rate, the taxes and fringe benefits.

Standard direct labor rate:

Direct labor rate= 12

Payroll taxes= (12*0.13)= 1.56

Fringe benefits= 6

Total= $19.56