Chapter 11, Problem 11.4E

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	1.0 hour
Hourly wage rate	$12
Payroll taxes	10% of wage rate
Setup and downtime	20% of actual labor time
Cleanup and rest periods	30% of actual labor time
Fringe benefits	25% of wage rate

Instructions

(a) Determine the standard direct labor hours per oil change.

(b) Determine the standard direct labor hourly rate.

(c) Determine the standard direct labor cost per oil change.

(d) If an oil change took 1.6 hours at the standard hourly rate, what was the direct labor quantity variance?