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

A company is setting its direct materials and direct labor standards for its leading product. Direct material costs from the supplier are​ $7 per square​ foot, net of purchase discount.​ Freight-in amounts to​ $0.10 per square foot. Basic wages of the assembly line personnel are​ $19 per hour. Payroll taxes are approximately​ 25% of wages. How much is the direct labor cost standard per​ 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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