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Exercise 23-4 (Part Level Submission) (a) Open Show Work SHOW SOLUTION SHOW ANSW

ID: 2578363 • Letter: E

Question

Exercise 23-4 (Part Level Submission)

(a)

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(b)

Exercise 23-4 (Part Level Submission)

Monte Services, Inc. is trying to establish the standard labor cost of a typical brake repair. The following data have been collected from time and motion studies conducted over the past month.
Actual time spent on the brake repair 1.0 hour Hourly wage rate $12 Payroll taxes 10% of wage rate Setup and downtime 20% of actual labor time Cleanup and rest periods 30% of actual labor time Fringe benefits 25% of wage rate

(a)

Your answer is correct. Determine the standard direct labor hours per brake repair. (Round answer to 2 decimal places, e.g. 1.25.)
Standard direct labor hours per brake repair

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(b)

Determine the standard direct labor hourly rate. (Round answer to 2 decimal places, e.g. 1.25.)
Standard direct labor hourly rate

Explanation / Answer

Determine the standard direct labor hours per brake repair.

Standard direct labor hours per oil change = 1+1*20%+1*30% = 1.5 hours

Standard direct labor hours per oil change = 1.50 hours

Determine the standard direct labor hourly rate.

Standard direct labor hourly rate = 12+12*10%+12*25%

Standard direct labor hourly rate = $ 16.20