Copyright

Larkin Company accumulated the following standard cost data concerning product I-Tal. Direct...

Question:

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.

Standard Cost:

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:


Description Amount ($)
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


Learn more about this topic:

Loading...
Standard Costs: Definition & Advantages

from Accounting 301: Applied Managerial Accounting

Chapter 13 / Lesson 1
5.5K

Related to this Question

Explore our homework questions and answers library