Problem
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 4.00 hour
Hourly wage rate $12
Payroll taxes 13% of wage rate
Setup and downtime 7% of actual labor time
Cleanup and rest periods 26% of actual labor time
Fringe benefits 24% of wage rate
a. Determine the standard direct labor hours per oil change.
b. Determine the standard direct labor hourly rate.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.