Daughdrill Corporation is developing direct labor standards. The basic direct labor wage rate is $10.95 per hour. Employment taxes are 9% of the basic wage rate. Fringe benefits are $4.00 per direct labor-hour. The standard rate per direct labor-hour should be:
A) $5.96
B) $4.99
C) $10.95
D) $15.94

Question

Quizplus · Accepted Answer

To calculate the standard rate per direct labor-hour, we need to add the employment taxes and fringe benefits to the basic wage rate. 
Employment taxes = 9% of $10.95 = $0.9865 (rounded to $0.99)
Fringe benefits = $4.00
Standard rate per direct labor-hour = $10.95 + $0.99 + $4.00 = $15.94. 
Therefore, the correct answer is D, $15.94.

Daughdrill Corporation Is Developing Direct Labor Standards