Pittmon Corporation Is Developing Direct Labor Standards

question 74

Essay

Pittmon Corporation is developing direct labor standards. The basic direct labor wage rate is $13.90 per hour. Employment taxes are 10% of the basic wage rate. Fringe benefits are $4.28 per hour. A particular product requires 0.90 direct labor-hours per unit. The allowance for breaks and personal needs is 0.07 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.12 direct labor-hours per unit.
Required:
a. Determine the standard rate per direct labor-hour. Show your work!
b. Determine the standard direct labor-hours per unit of product. Show your work!
c. Determine the standard labor cost per unit of product to the nearest cent. Show your work!

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Definitions:

Human Resource Department

The department within an organization responsible for recruitment, training, employee relations, and benefits administration.

Involuntary Turnover

The termination of an employee's position due to external factors beyond their control, such as layoffs or downsizing.

Outcome Fairness

The perception that the outcomes of a decision or process are distributed in a manner that is considered equitable and just among all parties involved.

Interactional Justice

The perception of fairness in the interpersonal treatment individuals receive in organizational decision-making processes.