Wolanin Corporation, which manufactures straw hats, is developing direct labour standards. The basic direct labour rate is $20.00 per hour. Payroll taxes are 15% of the basic direct labour rate, while fringe benefits such as vacation and health care insurance, are $5.00 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 ($20.00) to the payroll taxes (15% of $20.00, which is $3.00) and the fringe benefits ($5.00). Therefore, $20.00 + $3.00 + $5.00 = $28.00.

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