Question

Oak Valley​ 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 $ 5.00 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 $ 5.00 per hour. How much is the direct materials standard cost per square​ foot?

Answer 1

Standard cost direct material= $5.4 per square foot

Step-by-step explanation:

Giving the following information:

The current cost of cedarwood is $ 5.00 per square foot from the supplier. Delivery costs are $ 0.40 per square foot.​

When calculating the standard costs of direct materials, you need to take into account the freight in costs.

Standard cost direct material= 5 + 0.4

Standard cost direct material= $5.4 per square foot