Nadia Corporation,which manufactures straw hats,is developing direct labor standards.The basic direct labor rate is $10.00 per hour.Payroll taxes are 12% of the basic direct labor rate,while fringe benefits such as vacation and health care insurance,are $4.00 per hour.What is the standard rate per direct labor hour?

Question

Quizplus · Accepted Answer

To calculate the standard rate per direct labor hour, we need to add the basic direct labor rate, payroll taxes, and fringe benefits.

Payroll taxes = 12% of basic direct labor rate = 0.12 x $10.00 = $1.20

Fringe benefits = $4.00

Standard rate per direct labor hour = Basic direct labor rate + Payroll taxes + Fringe benefits

= $10.00 + $1.20 + $4.00

= $15.20

Therefore, the correct answer is A) $15.20.

Nadia Corporation,which Manufactures Straw Hats,is Developing Direct Labor Standards