A Company Is Setting Its Direct Materials and Direct Labor

question 97

Multiple Choice

A company is setting its direct materials and direct labor standards for its leading product.Direct material costs from the supplier are $9 per square foot,net of purchase discount.Freight-in amounts to $0.20 per square foot.Basic wages of the assembly line personnel are $14 per hour.Payroll taxes are approximately 22% of wages.How much is the direct labor cost standard per hour? (Round your answer to the nearest cent.)

• A)$3.08
• B)$14.00
• C)$17.08
• D)$26.08

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Definitions:

Tax Accounting

The area of accounting that deals with preparing tax returns and planning for future tax obligations.

Depletion

An accounting method used to allocate the cost of extracting natural resources over the period of their extraction.

Depreciation

A method of allocating the cost of a tangible asset over its useful life.

Total Depreciation Expense

The cumulative amount of an asset's cost that has been allocated as expense due to wear and tear over its useful life.