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AE22-4Feldkamp 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 pastmonth.Actual time spent on the oil change4.0 hourHourly wage rate$13.00Payroll taxes10% of wage rateSetup and downtime10% of actual labor timeCleanup and rest periods20% of actual labor timeFringe benefits25% of wage rateYour answer is correct.Determine the standard direct labor hours per oil change.e.g. 5.1.)hoursExplanationActual service time4.0 hoursSetup and downtime (4.0 × 10%)0.4 hoursCleanup and rest periods (4.0 × 20%) 0.8 hoursStandard direct labor hours per oilchange5.2 hoursDetermine the standard direct labor hourly rate.
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Employee Benefit,$1.76,standard direct labor,$13.00