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The following direct labor information pertains to the manufacture of product Glu:Time required to make one unit 2 direct labor hoursNumber of direct workers 50Number of productive hours per week, per worker 40Weekly wages per worker $500Workers' benefits treated as direct labor costs 20% of wagesWhat is the standard direct labor cost per unit of product Glu? A.$30 B.$24C.$15D.$12

Question

The following direct labor information pertains to the manufacture of product Glu:Time required to make one unit 2 direct labor hoursNumber of direct workers 50Number of productive hours per week, per worker 40Weekly wages per worker 500Workersbenefitstreatedasdirectlaborcosts20500Workers' benefits treated as direct labor costs 20% of wagesWhat is the standard direct labor cost per unit of product Glu? A.30 B.24C.24C.15D.$12

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Solution

To calculate the standard direct labor cost per unit of product Glu, follow these steps:

  1. Calculate the total weekly wages for all workers: 50 workers * 500/worker=500/worker = 25,000
  2. Calculate the total weekly benefits for all workers: 25,0002025,000 * 20% = 5,000
  3. Add the total weekly wages and benefits to get the total weekly labor cost: 25,000+25,000 + 5,000 = $30,000
  4. Calculate the total number of productive hours per week for all workers: 50 workers * 40 hours/worker = 2,000 hours
  5. Calculate the standard labor cost per hour: 30,000/2,000hours=30,000 / 2,000 hours = 15/hour
  6. Since it takes 2 hours to make one unit of product Glu, the standard direct labor cost per unit is: 2 hours/unit * 15/hour=15/hour = 30/unit

So, the answer is A. $30.

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