Direct materials standard

In 100 words or more reply to the statement below about direct materials standard.

Raw materials that are traceable to manufactured product is direct materials. For example, the amount of bananas it takes to make banana bread would be direct materials. One would analyze how many direct materials go into a product and determine the cost of every single unit. In most products there is more than one direct material and to get accurate cost one must separate the standard prices of each direct material. For example, Pizza Hut may pay $10 for a pound of cheese. There would also be extra charges for freight and receiving and handling. It could potentially cost $0.30 for S&H and $0.10 per pound on freight. The direct materials standard price would be $10.40.

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