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?

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)

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:

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

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

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Working standards ,

Details

Class: College

Subject: Business

Keyword: The standard level of direct work.

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