A company is setting its direct materials and direct labor standards for its leading product. Materials cost from the supplier are $5 per square foot, net of purchase discount. Freight-in amounts to $0.10 per square foot. Basic wages of the assembly line personnel are $10 per hour. Payroll taxes are approximately 20% of wages. Benefits amount to $2 per hour. How much is the direct material cost standard (per square foot)?
A)$5.10 per square foot
B)$5.00 per square foot
C)$12.00 per square foot
D)$17.10 per square foot

Question

Quizplus · Accepted Answer

Direct material cost standard per square foot will be:
$5 (materials cost) + $0.10 (freight-in) = $5.10 per square foot.

A Company Is Setting Its Direct Materials and Direct Labor