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 $ 0.25 per square foot.​ Carpenters' wages are $ 20.00 per hour. Payroll costs are $ 4.00 per​ hour, and benefits are $ 5.00 per hour. How much is the direct labor standard cost per​ hour?

Answer 1

$29

Step-by-step explanation:

The direct labor standard cost corresponds to the costs related to employees directly related to the manufacturing process of the product. In this case, the cost of cedar wood is classified as direct materials cost, while delivery costs are post-production costs. Therefore, the direct labor standard cost is composed by the carpenters' wages, payroll costs, and benefits:

`C = 20.00+4.00+5.00\\C=\$29/hour`

The direct labor standard cost per​ hour is $29.