Question

Piper​ Corporation, which manufactures dog​ toys, is developing direct labor standards. The basic direct labor rate is​ $16.79 per hour. Payroll taxes are​ 15% of the basic direct labor​ rate, while fringe benefits such as vacation and health care​ insurance, are​ $6.41 per hour. What is the standard rate per direct labor​ hour?

Answer 1

Answer:

direct labor hour 25.72

Explanation:

16.79 + 15% taxes + vacation and HI 6,41

16.79 + 16.79 x 15% + 6.41

16.79 + 2.5185 + 6.41 = 25.7185 = 25.72

Notes:

The assignment state the payroll taxes only apply to the basic direct labor rate, so we should assume the fringe benefit are tax-exempt

Answer 2

Is known :

Basic direct labor costs = $ 16.79 per hour

Payroll tax = 15%

Additional allowance = $ 6.41 per hour

Asked:

The standard rate per hour of direct work?

Settlement:

SRDw = work time x BDLc

SRDw = 1 x $ 14.29

SRDw = $ 14.29

So the standard direct hourly rate is $ 14.29

Note = The value of $ 14.29 is from the calculation of $ 16.79 - 15% (amount of basic direct labor tax)

Further explanation

Direct Labor Cost Budget

Direct Labor is human labor that works directly to process products. For example, for rattan chair manufacturers, it is cutters, chair gauges, chair assemblers, chair planers, and chair color craftsmen. The wages are called Direct Labor Costs.

Direct labor costs are estimates of the number of direct labor hours needed to produce certain products. How:

• Calculate the average hours worked in a job based on the previous period's base price card
• Run production operations under the expected normal conditions
• Conducting investigations of motion and time
• Making reasonable estimates

• Take into account the looseness of time for rest, work delays that can not be avoided, and fatigue

Estimated direct hourly wage rates that can be determined based on:

• Agreement with employee/labor organizations
• Past wage data calculated on average
• Calculation of wage rates in normal operation.

To calculate the standard rate per hour of direct work can be completed with the following formula:

SRDw = work time x BDLc

Information :

SRDw = standard rate per hour of direct work

BDLc = Basic direct labor costs

Learn more

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Details

Class: College

Subject: Business

Keyword: The standard level of direct work.