Question: Monte Services Inc is trying to establish the standard labor

Monte Services, Inc. is trying to establish the standard labor cost of a typical oil change. The following data have been collected from time and motion studies conducted over the past month.
Actual time spent on the oil change .........1.0 hour
Hourly wage rate ................$12
Payroll taxes ...................10% of wage rate
Setup and downtime ...............20% of actual labor time
Cleanup and rest periods ............30% of actual labor time
Fringe benefits ................25% of wage rate
Instructions
(a) Determine the standard direct labor hours per oil change.
(b) Determine the standard direct labor hourly rate.
(c) Determine the standard direct labor cost per oil change.
(d) If an oil change took 1.6 hours at the standard hourly rate, what was the direct labor quantity variance?


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  • CreatedMarch 22, 2012
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