Answer:
The correct answer is E.
Explanation:
Giving the following information:
ShipCo. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is assigned at the rate of $9 per direct labor hour.
Direct material= 1.2*0.85= $1.02
Direct labor= 0.1*15= $1.5
Overhead= 0.1*9= $0.9
Total= $3.42
Answer:
E. $3.42
Explanation:
Standard cost is the charge/cost to be budgeted to be incurred on a process, unit or manufacturing activity based on reliable estimates. The standard cost is usually compared with the actual cost after production has taken place.
It comprises of:
Direct material Cost : The standard quantity/unit of material to be used at a standard price.
Direct Labor Cost: The standard hours to be utilised at the standard rate for labour.
Overhead Cost: The estimated overhead fixed overhead charge and the variable overhead rate and the number of hours for applying the fixed and variable overhead rate.
Calculation
Material Cost = 1.2metres × $0.85 = $1.02
Labour Cost = 0.1 × $15 = $1.5
Overhead Cost = 0.1 × $9 = $0.90
Total Standard Cost = $[1.02 + 1.5 + 0.90] = $3.42
