Larkin Company accumulated the following standard cost data concerning product I-Tal.
Direct materials per unit: 2.10 pounds at $6.36 per pound
Direct labor per unit: 5.26 hours at $10 per hour
Manufacturing overhead: Allocated based on direct labor hours at a predetermined rate of $19.00 per direct labor hour
Compute the standard cost of one unit of product I-Tal.
Under standard costing, standard costs are set for each component of the cost such as material, labor, overhead, selling price and are applied to the actual output or sales volume. The difference in standard costs and actual costs are known as variances.
Answer and Explanation:
Standard cost per unit of the product I-Tal:
|Direct material cost (2.10 pounds * $6.36 per pound)||$13.36|
|Direct labor (5.26 hours * $10 per hour)||$52.60|
|Prime cost (direct material + direct labor)||$65.96|
|Add: Manufacturing overhead (5.26 hours * $19 per hour)||$99.94|
|Standard cost per unit||$165.90|
Become a member and unlock all Study Answers
Try it risk-free for 30 daysTry it risk-free
Ask a question
Our experts can answer your tough homework and study questions.Ask a question Ask a question
Learn more about this topic:
from Accounting 301: Applied Managerial AccountingChapter 13 / Lesson 1