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 $ 9.00 per square foot from the supplier. Delivery costs are $ 0.30 per square foot.​ Carpenters' wages are $ 25.00 per hour. Payroll costs are $ 3.60 per​ hour, and benefits are $ 5.00 per hour. How much is the direct labor standard cost per​ hour? A. $ 33.60 B. $ 8.60 C. $ 25.00 D. $ 28.60

Answer 1

Answer:

$33.60

Explanation:

The direct labor standard cost per hour should include the hourly wages and benefits of all employees related to production process. The listed costs that should be considered are carpenters' wages, payroll costs, and benefits.

Direct labor standard cost per hour is:

$L = \ 25.00+\ 5.00+\ 3.60\\L=\ 33.60$

The answer is A. $ 33.60