Brief Exercise 25-3 Labor data for making one gallon of finished product in Bing

Question

Brief Exercise 25-3 Labor data for making one gallon of finished product in Bing Company are as follows. (1) Price—hourly wage rate $16.26, payroll taxes $0.88, and fringe benefits $1.58. (2) Quantity—actual production time 1.28 hours, rest periods and cleanup 0.26 hours, and setup and downtime 0.18 hours. Compute the following. (Round answers to 2 decimal places, e.g. 1.25.) (a) Standard direct labor rate per hour. $ (b) Standard direct labor hours per gallon. hours (c) Standard labor cost per gallon. $

Explanation / Answer

(a) Standard direct labor rate per hour = 16.26+0.88+1.58 = 18.72 per hour

(b) Standard direct labor hours per gallon = 1.28+0.26+0.18 = 1.72 hour

(c) Standard labor cost per gallon = (18.72*1.72) = 32.20

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