A Company Is Setting Its Direct Materials and Direct Labor

Multiple Choice

A company is setting its direct materials and direct labor standards for its leading product. Materials cost from the supplier are $5 per square foot, net of purchase discount. Freight-in amounts to $0.10 per square foot. Basic wages of the assembly line personnel are $10 per hour. Payroll taxes are approximately 20% of wages. Benefits amount to $2 per hour. How much is the direct material cost standard (per square foot) ?

A) $5.10 per square foot
B) $5.00 per square foot
C) $12.00 per square foot
D) $17.10 per square foot