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. Standard direct labor hours per gallon. hours (c) Standard labor cost per gallon

Explanation / Answer

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

b) Standard direct labour hour per gallon = (1.28+0.26+0.18) = 1.72 Hours

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

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