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

Question

Quizplus · Accepted Answer

The standard rate per direct labour hour is calculated by adding the basic direct labour rate ($10.00) to the payroll taxes (12% of $10.00 = $1.20) and the fringe benefits ($4.00). Therefore, $10.00 + $1.20 + $4.00 = $15.20.

Nadia Corporation, Which Manufactures Straw Hats, Is Developing Direct Labour