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Question - Engines Done Right Co. is trying to establish the standard labor cost of a typical engine tune-up. The fol lowing data have been collected from time and motion studies conducted over the past month.
Actual time spent on the tune-up 1.0 hour
Hourly wage rate $16
Payroll taxes 10% of wage rate
Setup and downtime 10% of actual labor time
Cleanup and rest periods 20% of actual labor time
Fringe benefits 25% of wage rate
Required -
(a) Determine the standard direct labor hours per tune-up.
(b) Determine the standard direct labor hourly rate.
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