A company is setting its direct materials and direct labor standards for its leading product.Direct materials cost from the supplier are $9 per square foot,net of purchase discount.Freight-in amounts to $0.40 per square foot.Basic wages of the assembly line personnel are $14 per hour.Payroll taxes are approximately 21% of wages.Benefits amount to $2 per hour.How much is the direct materials cost standard per square foot?
A) $9.40
B) $9.00
C) $16.00
D) $25.00

Question

Quizplus · Accepted Answer

Direct materials cost standard (per square foot) = Cost per square foot + Freight-in cost
Direct materials cost standard (per square foot) = $9.00 + $0.40 = $9.40

A Company Is Setting Its Direct Materials and Direct Labor