ABC Company budgeted sales for June, July and August are 1 200 18.200, and 16.20

Question

ABC Company budgeted sales for June, July and August are 1 200 18.200, and 16.20 units respectively. Each unit at ABC Company produces uses 2 pound of raw material ABC req 25% the next month's budgeted production as raw material inventory each month. ABC Company currently pays a standard rate of $1.2 per pound for raw materials. Each unit should be produced in 30 minutes of direct labor time at a standard direct labor rate of $9 per hour. Manufacturing overhead is applied at the standard rate of $12 per direct labor hour Required: Calculate the standard cost per unit for ABC Company (Round your answer to 2 decimal places.) cost

Explanation / Answer

the following is the calculation of standard cost.

Raw material ($1.20 per pound * 2 pounds per unit) $2.40 direct labour ($9 per hour * 30 minutes / 60 minutes) $4.50 overhead ($12 per hour * 30 minutes / 60 minutes) $6.00 total standard cost per unit $12.90

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