Brief Exercise 23-3 Labor data for making one gallon of finished product in Bing

Question

Brief Exercise 23-3 Labor data for making one gallon of finished product in Bing Company are as follows. (1) Price-hourly wage rate $13.62, payroll taxes $0.78, and fringe benefits $1.66. (2) Quantity-actual production time 1.20 hours, rest periods and cleanup 0.34 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 (c) Standard labor cost per gallon. Click if you would like to Show Work for this question: hours Open Show Work

Explanation / Answer

a) standard direct labor rate per hour = $13.62 + $0.78 + $1.66

= $16.06

b) standard direct labor hours per gallon = 1.2 hrs + 0.34hrs + 0.18hrs

= 1.72 hours

c) standard labor cost per gallon = standard direct labor rate per hour* standard direct labor hours per gallon

=  $16.06 * 1.72 hours

= $27.62

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