Rapid Repair Services, Inc. is trying to establish the standard labour cost of a typical oil change.
Question:
Actual time spent on the oil change.......................................1.0 hour
Hourly wage rate.............................................................$12.00
Payroll taxes......................................................10% of wage rate
Set-up and downtime................................ 20% of actual labour time
Cleanup and rest periods............................. 30% of actual labour time
Fringe benefits....................................................25% of wage rate
Instructions
(a) Determine the standard direct labour hours per oil change.
(b) Determine the direct labour hourly rate.
(c) Determine the direct labour cost per oil change.
(d) If an oil change took 1.6 hours at the standard hourly rate, what was the direct labour quantity variance?
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Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118856994
4th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
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