Crane Company produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.1 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $6 per hour, but a raise which will average $0.40 will go into effect soon. Payroll taxes are $1.30 per hour, and fringe benefits average $2.50 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is 0.2 hours and 0.1 hours, respectively. The standard direct labor hours per unit is : a. 1.8 hours.
b. 1.6 hours.
c. 1.9 hours.
d. 1.5 hour.