A company is setting its direct materials and direct labor standards for its leading product.Direct material costs from the supplier are $9 per square foot,net of purchase discount.Freight-in amounts to $0.20 per square foot.Basic wages of the assembly line personnel are $14 per hour.Payroll taxes are approximately 22% of wages.How much is the direct labor cost standard per hour? (Round your answer to the nearest cent.)
A)$3.08
B)$14.00
C)$17.08
D)$26.08

Question

Quizplus · Accepted Answer

To calculate the direct material cost standard per square foot, we add the cost of the materials and the freight-in: $9 + $0.20 = $9.20.
To calculate the direct labor cost standard per hour, we need to add the payroll taxes to the basic wage: $14.00 x 22% = $3.08. Adding this to the basic wage gives us a direct labor cost standard per hour of $14 + $3.08 = $17.08, which is answer choice C.

A Company Is Setting Its Direct Materials and Direct Labor