Question

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. Actual time spent on the brake repair Hourly wage rate Payroll taxes Setup and downtime Cleanup and rest periods Fringe benefits 3.0 hour $14 19% of wage rate 10% of actual labor time 31% of actual labor time 26% of wage rate (a) x] Your answer is incorrect. Try again. Determine the standard direct labor hours per brake repair. (Round answer to 2 decimal places, e.g. 1.25.) Standard direct labor hours per brake repair L 109.62 hours hours

Answer 1

A) Determination of standard direct labor hours per brake repair

Actual time spent on the oil change. = 3 hours

set up and down time 10% of actual labor time

Cleanup and rest periods = 31% of actual labor time

= 3 + (3*10%) + (3*31%)

= 4.23 hours

B) Determination of standard direct labor hourly rate

hourly wage rate = $14

Payroll tax = 19% of wage rate

Fringe benefits = 26% of wage rate

= $14 + ($14*19%) + ($14 * 26%)

= $20.30

So, standard direct labor hours per brake repair = 4.23 hours