Question

Ship Co. produces storage crates that require 1.2 meters of material at $ 0.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is applied at the rate of $9 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?

a. $25.02.
b. $11.52.
c. $2.40.
d. $2.52.
e. $3.42.

Answer 1

Answer:

b. $11.52.

Explanation:

Standard Cost is the budgeted cost that business estimates to be for the a specific period. Actual cost may be difference from the standard cost.

Standard Material cos = 1.2 meter x $0.85 = $1.02 per unit

Direct labor cost = 0.1 x $15 = $1.5 per unit

Overhead applied rate = $9 per unit

Total cost per unit = $1.02 + $1.5 + $9 = $11.52

The standard cost is $11.52 per unit