Jay Bole Is in the Process of Developing a Standard

question 14

Multiple Choice

Jay Bole is in the process of developing a standard for the labour cost of one unit of Product X.According to the design manual,it takes a skilled worker 30 minutes to produce one unit of Product X when the workshop is operating at peak condition.However,Product X is quite complex and even a skilled worker operating in high efficiency often needs another 5 minutes to adjust the tools,re-oil the machine and rework some aspects of the product.A skilled worker is paid $30 per hour,while the company pays 20% on-costs on top of this.Jay decides to develop a perfection standard.The standard labour cost for one unit of Product X is:

• A) $15
• B) $17.50
• C) $18
• D) $21