Waterstone Industries is setting standard costs for one of its products.The main material is ﬁber board sold by the square foot.The current cost of ﬁber board is $4.00 per square foot from Waterstone's preferred supplier.Delivery costs are $0.25 per board foot.Waterstone's wages per hour are $25.00.Payroll costs are $3.60 per hour and beneﬁts are $5.00 per hour.How much is the direct materials cost standard per square foot?
A)$9.25 per hour.
B)$4.00 per hour.
C)$4.25 per hour.
D)$7.85 per hour.
E)None of the answers is correct.

Question

Quizplus · Accepted Answer

Direct materials cost standard per square foot = cost of fiber board per square foot + delivery costs per board foot
= $4.00 + ($0.25/12) [since 1 board foot = 12 square feet]
= $4.00 + $0.02
= $4.02
Therefore, the direct materials cost standard per square foot is $4.02, which is closest to option C ($4.25 per hour).

Waterstone Industries Is Setting Standard Costs for One of Its