Piper Corporation, which manufactures dog toys, is developing direct labor standards. The basic direct labor rate is $12.00 per hour. Payroll taxes are 13% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance, are $6.00 per hour. What is the standard rate per direct labor hour?

A $13.56 B. $18.00 C. $12.00 D. $19.56

D. $19.56

Explanation:

The computation of the standard rate per direct labor hour is shown below:

= Basic direct labor rate + payroll tax rate percentage * Basic direct labor rate + fringe benefits per hour

= $12 + $12 * 13% + $6

= $12 + $1.56 + $6

= $19.56

We simply added the basic direct labor rate + payroll tax rate + fringe benefits per hour so that the correct rate per direct labor hour can come