Kandy Harts manufactures custom T-shirts.Each T-shirt can be imprinted front and back with photos,company logos or other information.Each T-shirt requires 2 ounces of ink,15 minutes of direct labor processing,folding,packaging,and a plastic bag for packaging.The following information is available regarding costs: Kandy applied overhead at a rate of $9.40 per direct labor hour,and fringe benefits for workers are an additional 20% of wages.What is the standard price and standard quantity for direct labor?
A)$16.00; 0.25 hour
B)$19.20; 0.25 hour
C)$4.80; 1 hour
D)$4.80; 0.25 hour

Question

Kandy Harts manufactures custom T-shirts.Each T-shirt can be imprinted front and back with photos,company logos or other information.Each T-shirt requires 2 ounces of ink,15 minutes of direct labor processing,folding,packaging,and a plastic bag for packaging.The following information is available regarding costs:  Kandy applied overhead at a rate of $9.40 per direct labor hour,and fringe benefits for workers are an additional 20% of wages.What is the standard price and standard quantity for direct labor?
A)$16.00; 0.25 hour 
B)$19.20; 0.25 hour 
C)$4.80; 1 hour 
D)$4.80; 0.25 hour

Quizplus · Accepted Answer

To calculate the standard price and standard quantity for direct labor, we need to find the labor cost per T-shirt.

Direct labor cost per T-shirt = 15 minutes of direct labor processing at an overhead rate of $9.40 per hour
= 0.25 hours x $9.40 per hour = $2.35

Fringe benefits for workers are an additional 20% of wages, so the total direct labor cost per T-shirt is:

Total direct labor cost per T-shirt = $2.35 + (20% x $2.35) = $2.82

Therefore, the standard price for direct labor is $2.82.

To find the standard quantity for direct labor, we need to know how much direct labor is required to make one T-shirt.

According to the problem, each T-shirt requires 15 minutes of direct labor processing, which is equivalent to 0.25 hours.

Therefore, the standard quantity for direct labor is 0.25 hour.

The best choice is B.

Kandy Harts Manufactures Custom T-Shirts