Question

Cedar Designs​ Company, a custom cabinet manufacturing​ company, is setting standard costs for one of its products. The main material is cedar​ wood, sold by the square foot. The current cost of cedar wood is $ 7.00 per square foot from the supplier. Delivery costs are $ 0.40 per square foot.​ Carpenters' wages are $ 20.00 per hour. Payroll costs are $ 3.00 per​ hour, and benefits are $ 6.00 per hour. How much is the direct labor standard cost per​ hour? A. $ 9.00 B. $ 23.00 C. $ 29.00 D. $ 20.00

Answer 1

Answer:

Standard direct labour cost = $20.00   per hour

Explanation:

The direct labour costs represent expenditures incurred in respect of direct worker which can be traced to the product been produced. For example, the labour cost of machine operator saddled with production task.

The payroll cost is not a direct labour cost because payroll employed are not direct workers, also benefits are overheads related to direct workers

Standard direct labour cost = $20.00