A Company Is Setting Its Direct Materials and Direct Labor

question 82

Multiple Choice

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. How much is the direct labor cost standard (per hour) ?

• A)$2 per hour
• B)$10 per hour
• C)$12 per hour
• D)$17 per hour

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Definitions:

Historical Rates

The exchange rates from past periods used for translating transactions in foreign currencies or financial statements of foreign operations.

Transaction Exposure

The potential risk of exchange rate movements affecting the value of a company's financial transactions denominated in foreign currencies.

Risk Exposure

The extent to which an entity is vulnerable to losses from operational, financial, or market-related risks.

Time of Settling

The specific point when the obligations of a financial transaction are fulfilled.