Question

Wood 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 $ 5 per square foot from the supplier. Delivery costs are $ 0.25 per board foot.​ Carpenters' wages are $ 20 per hour. Payroll costs are $ 3.00 per hour and benefits are $ 7 per hour. How much is the direct materials cost standard​ (per square​ foot)?

Answer 1

$5.25 per unit

Step-by-step explanation:

The reason is that the direct cost are those costs that can be calculated very easily and are directly attributable to a single unit. In this case, we are finding direct material cost which would include all the material costs that are used to make a single unit which includes delivery of material $0.25 and material purchase cost of $5 per square foot. So the total direct material cost is $5.25.