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2 AJ Company is setting standards for its one product. Direct materials cost from...

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Accounting

2 AJ Company is setting standards for its one product. Direct materials cost from the supplier is
budgeted at $11 per gallon, sales tax of $.65 per gallon and $.25 per gallon in shipping costs.
AJ estimates wages of the assembly line workers is $15 per hour, benefits of $4 per hour
and payroll taxes average 17% of the basic wage.
The company allocates variable overhead based on direct labor hours. The static
budget estimates total variable costs at $41,000 with 10,000 direct labor hours.
1 What is the standard material cost per gallon?
2 What is the standard direct labor cost per hour?
3 What is the standard cost per direct labor for variable cost?

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