Question

A company is setting its direct materials and direct labor standards for its leading product. Direct materials cost from the supplier are $8 per square foot, net of purchase discount. Freight-in amounts to $0.10 per square foot. Basic wages of the assembly line personnel are $18 per hour. Payroll taxes are approximately 25% of wages. Benefits amount to $4 per hour. How much is the direct materials cost standard per square foot? A) $22.00 B) $8.00 C) $30.00 D) $8.10

Answer 1

	CALCULATION OF DIRECT MATERIAL COST STANDARD PER SQUARE FOOT
	Standard Cost per Unit = Direct Material Cost Per Square Foot + Freight In Per Square foot
	Standard Cost per Unit = $ 8.00 + $ 0.10
	Standard Cost per Unit = $ 8.10
	Answer = Option D = $ 8.10