A Company Is Setting Its Direct Materials and Direct Labor

A company is setting its direct materials and direct labor standards for its leading product. Materials cost from the supplier are $5 per square foot, net of purchase discount. Freight-in amounts to $0.10 per square foot. Basic wages of the assembly line personnel are $10 per hour. Payroll taxes are approximately 20% of wages. How much is the direct labor cost standard (per hour) ?

A) $2 per hour
B) $10 per hour
C) $12 per hour
D) $17 per hour

Correct Answer:

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