Coronado Industries 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 $12 per hour, but a raise which will average $0.20 will go into effect soon. Payroll taxes are $1.10 per hour, and fringe benefits average $2.30 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 rate per hour is:.

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Answeraggregate demand and the short-run aggregate supply fluctuate, but the money wages does not change rapidly enough to keep real gdp at potential gdp;