Stanton Company is planning to produce 1,400 units of product in 2012. Each unit

Question

Stanton Company is planning to produce 1,400 units of product in 2012. Each unit requires 1.40 pounds of materials at $6.40 per pound and a half-hour of labor at $13.00 per hour. The overhead rate is 80% of direct labor.

A)

Compute the budgeted amounts for 2012 for direct materials to be used, direct labor, and applied overhead.

(b) Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.)

Direct materials $ Direct labor $ Overhead $ Stanton Company is planning to produce 1,400 units of product in 2012. Each unit requires 1.40 pounds of materials at $6.40 per pound and a half-hour of labor at $13.00 per hour. The overhead rate is 80% of direct labor. Compute the budgeted amounts for 2012 for direct materials to be used, direct labor, and applied overhead. Compute the standard cost of one unit of product. (Round answer to 2 decimal places, e.g. 2.75.)

Explanation / Answer

Hi,

Please find the answer as follows:

Part A:

Part B:

Standard Cost Per Unit = (12544 + 9100 + 7280)/1400 = 20.66

Thanks.

Direct Material 12544 Direct Labor 9100 Overhead 7280

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