A company is setting its direct materials and direct labor standards for its leading product.Direct materials cost from the supplier are $8 per square foot,net of purchase discount.Freight-in amounts to $0.10 per square foot.Basic wages of the assembly line personnel are $18 per hour.Payroll taxes are approximately 25% of wages.Benefits amount to $4 per hour.How much is the direct materials cost standard per square foot?
A)$8.10
B)$8.00
C)$22.00
D)$30.00

Question

Quizplus · Accepted Answer

Direct Materials Cost Standard per square foot = $8.00 (cost from supplier) + $0.10 (freight-in) = $8.10. Thus, the correct choice is A. Option B is incorrect as it only factors in the cost from the supplier, omitting the freight-in amount. Option C and D are irrelevant to the question.

A Company Is Setting Its Direct Materials and Direct Labor