Artscapes Company Is Setting Its Direct Materials and Direct Labor

question 99

Multiple Choice

Artscapes Company is setting its direct materials and direct labor standards for its leading product. Materials cost from the supplier are $4.50 per square foot, net of purchase discount. Freight-in amounts to $0.10 per square foot. Basic wages of the assembly line personnel are $12.00 per hour. Payroll taxes are approximately 20% of wages. Benefits amount to $3.00 per hour. How much is the direct labor price standard (per hour) ?

• A) $17.40 per hour
• B) $15.00 per hour
• C) $14.40 per hour
• D) $16.50 per hour

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Definitions:

Economically Desirable

Attributes or actions that are beneficial from an economic standpoint, promoting efficiency, growth, or productivity.

Producer Surplus

The difference between the amount producers are willing to supply a good for and the actual amount they receive by selling it.

Market Price

The current price at which a goods or service can be bought or sold in a particular market.