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Question - OMC Marine is trying to establish the standard labor cost of a typical water-cool pump repair. The following data have been collected from time and motion studies conducted over the past month.
Actual time spent on pump repair: 1.5 hours
Hourly wage rate: $18
Payroll taxes: 10% of the wage rate
Onsite setup and downtime: 10% of actual labor time
Final adjustments and testing: 20% of actual labor time
Fringe benefits: 25% of wage rate
Required -
(a) Determine the standard direct labor hours per pump repair
(b) Determine the standard direct labor hourly rate.
(c) Determine the standard direct labor cost per pump repair.
(d) If a pump repair took 1.75 hours at the standard hourly rate, what was the direct labor quantity variance?
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