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7 June, 12:06

Piper Corporation, which manufactures dog toys, is developing direct labor standards. The basic direct labor rate is $ 12.68$12.68 per hour. Payroll taxes are 1313 % of the basic direct labor rate, while fringe benefits such as vacation and health care insurance, are $ 7.33$7.33 per hour. What is the standard rate per direct labor hour?

A. $ 20.01 B. $ 12.68 C. $ 14.33D. $ 21.66

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  1. 7 June, 13:08
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    option (D) $21.66

    Explanation:

    Data provided in the question:

    Basic direct labor rate per hour = $12.68

    Payroll taxes = 13 % of basic direct labor rate

    Fringe benefits per hour = $7.33

    Now,

    The standard rate per direct labor hour

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

    = $12.68 + (13% of $12.68) + $7.33

    = $12.68 + $1.6484 + $7.33

    = $21.6584 or $21.66

    Hence,

    The correct answer is option (D) $21.66
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