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Home / Assignment Help / A company is setting its direct materials and direct labor standards for its leading product. Direct material costs from the supplier areâ€‹ \$7 per squareâ€‹ foot, net of purchase discount.â€‹ Freight-in amounts toâ€‹ \$0.10 per square foot. Basic wages of the assembly line personnel areâ€‹ \$19 per hour. Payroll taxes are approximatelyâ€‹ 25% of wages. How much is the direct labor cost standard perâ€‹ hour

# A company is setting its direct materials and direct labor standards for its leading product. Direct material costs from the supplier areâ€‹ \$7 per squareâ€‹ foot, net of purchase discount.â€‹ Freight-in amounts toâ€‹ \$0.10 per square foot. Basic wages of the assembly line personnel areâ€‹ \$19 per hour. Payroll taxes are approximatelyâ€‹ 25% of wages. How much is the direct labor cost standard perâ€‹ hour

The formula for calculating the direct labor standard is:

Direct labor standard = Basic wages + Payroll tax

or

Direct labor standard = Basic wages + 25% of Basic wages

Substituting the given values into the equation:

Direct labor standard = \$19 + 0.25 * \$19

Direct labor standard = \$23.75

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