Theresa Corporation, which manufactures baskets, is developing direct labor standards. The basic direct labor rate is $21.00 per hour. Payroll taxes are 9% 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?

Standard rate per direct labor hour is $27.1

Explanation:

Standard rate per direct labor hour includes the hourly pay rate, Payroll taxes and fringe benefits. For Theresa Corporation,

We have given that

Basic direct labor rate is $21.00 per hour

Payroll Taxes is 10% of basic direct labor rate i. e. 10% of $21.00 = $2.10 per hour

Fringe Benefits is $4.00 per hour.

So Standard rate per direct labor hour = $21.00 + $2.10 + $4.00 = $27.1