Question

Exercise 11-4 (Video) Monte Services, Inc. is trying to establish the standard labor cost of a typical brake repair. The following data have been collected from time and motion studies conducted over the past month Shours $10 Actualtime spent on the brake repairs Hourly wage rate Payroll taxes Setup and downtime Cleanup and rest periods Fringe benefits 10% of wage rate 11% of actual labor time 27% of actual labdtime 25% of wage rate Determine the standard direct labor hours per brake repairs (Hound answer to decimal places 1.25.) Standard direct labor hours per brakere hours LIETO VERY LINE TO TEXT

Answer 1

Answer:

Requirement 1: Compute standard direct labor hours per brake repair as follows

Particulars	Hours
Actual brake repair time in hours	5
Setup and down time (5 hour × 11%)	0.55
Cleanup and rest periods (5 hour × 27%)	1.35
Standard direct labor hours per brake repair	6.9

Requirement 2: Compute standard direct labor hourly rate as follows

Particulars	Amount
Wage rate per hour	$15.00
Payroll Taxes ($10× 10%)	$1
Fringe Benefits ($10 × 25%)	$2.5
Standard direct labor hourly rate	$18.5

Requirement 3: Compute standard direct labor cost per brake repair as follows

Standard direct labor cost = Standard direct labor hours per brake repair × standard direct labor rate per hour

= 6.9 hours × $18.5

= $127.65

Requirement 4: Compute direct labor quantity variance as follows

Direct labor quantity variance = (Actual Hours − Standard Hours) × Standard Rate

= (5.60 hours − 6.9 hours) × $18.5

= $24.05 Unfavorable