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Oak Valley Company, a custom cabinet manufacturing company, is setting standard

ID: 2582064 • Letter: O

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 $7.00 per square foot from the supplier. Delivery costs are $0.30 per square foot. Carpenters' wages are $25.00 per hour. Payroll costs are $3.60 per hour, and benefits are $6.00 per hour. How much is the direct materials standard cost per square foot? O A. $13.30 O B. $7.30 O C. $7.00 O D. $10.90

Explanation / Answer

Direct material standard cost per square foot = 7+0.3 = $7.30 Option B is correct