A Company Is Setting Its Direct Materials and Direct Labor

question 144

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. 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

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A legally binding agreement between two or more parties that outlines the terms and conditions of business transactions.

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