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
A .A) 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
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