A Winter Park labor rate is $37 per hour before a 31.0% labor burden. What loaded labor rate should be used?
Correct Answer
A) $48.47
Loaded labor rate equals base wage multiplied by one plus burden percentage.
Why This Is the Correct Answer
Loaded labor rate equals base wage multiplied by one plus burden percentage.
Why the Other Options Are Wrong
Option B: $11.47
$11.47 is below the supported result for loaded labor rate; it likely skips a premium-pay or employer-cost component.
Option C: $68.00
$68.00 is above the supported result for loaded labor rate; it likely pays the wrong premium tier or counts the same hours twice.
Option D: $58.47
$58.47 is above the supported result for loaded labor rate; it likely pays the wrong premium tier or counts the same hours twice.
Memory Technique
Who controlled base, who paid wage, where is the Estimator Prices record?
Reference Hint
Open-book path: tab Builder's Guide to Accounting, 2001 to Builder's Guide to Accounting, Labor burden and job cost estimating; verify the trade cost, production, or field-control rule before answering.
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