Labor cost analysis Schmidlap Corporation's labor contract calls for an hourly wage of $7 per hour for its production employees. The following data are available about the company's operations:

1. Employees work 8 hours a day, 5 days a week and have 2 weeks of paid vacation per year plus 10 paid holidays.

2. Payroll taxes are 7 percent for FICA on the first $55,000 of pay, .7 percent for FUTA and 2.1 percent for state unemployment insurance on the first $7,000 of pay, and .9 percent for workers' compensation insurance.

3. The company pays $750 per year into a guaranteed annual wage plan for each employee.

4. On the average 85 percent of production line time is direct labor and the remainder is indirect.

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REQUIRED a. Compute the total annual labor cost per employee. b. Determine the total cost per hour worked. c. Compute the total cost of labor per direct labor hour.