Answer :
Final answer:
The total direct labor cost for a job carried out by 6 workers, paid $23 per hour, with an overhead ratio of 1.5 and a personal time allowance percentage of 12% for a period of 13 days using 9.0 billable hours per work day is $21,312.72.
Explanation:
To calculate the total direct labor cost, first, you have to calculate the labor cost per day for six workers who work 9 hours each at a rate of $23 per hour. This comes to $23 * 9 hours * 6 workers = $1,242 per day.
Next, factor in the overhead ratio of 1.5. This means you should add 50% of the daily labor cost to account for overheads, leading to a total cost of $1,242 * 1.5 = $1,863.
Then, consider the personal time allowance of 12%, which represents the non-productive time to the workers. Subtract the combined overhead and labor cost by 12% to account for the personal time: $1,863 * (1 - 0.12) = $1,639.44.
Finally, for a project that takes 13 days, the total direct labor cost would be $1,639.44 * 13 = $21,312.72.
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