Problem 11-6 (Part Level Submission) XO-20 is an oil-based product used to remov

Question

Problem 11-6 (Part Level Submission) XO-20 is an oil-based product used to remove rust on bolts and nuts that are stuck. Its accounting system uses standard costs. The standards per 0.50-liter can of solution call for 0.81 liters of material and 4 hours of labor. (0.81 liters of material are needed due to evaporation in the production process.) The standard cost per liter of material is $2.30. The standard cost per hour for labor is $12.00. Overhead is applied at the rate of $16.78 per can. Expected production is 8,600 cans with fixed overhead per year of $54,868 and variable overhead of $10.40 per unit (a 0.50-liter can). During 2018, 7,700 cans were produced; 12,400 liters of material were purchased at a cost of $54,560; 9,200 liters of material were used in production. The cost of direct labor incurred in 2018 was $353,100, based on an average actual wage rate of $11 per hour. Actual overhead for 2018 was $126,200. (a) x Your answer is incorrect. Try again. Determine the standard cost per unit. (Round answer to 2 decimal places, e.g. 15.25.) Standard cost 60.70 per unit LINK TO TEXT LINK TO TEXT Attempts: 1 of 3 used SAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

Direct materials per unit = 0.81 liters

Cost per liter = 2.3

Direct material cost per unit = 0.81 * 2.3 = 1.863

Direct labour hours per unit = 4

Direct labour rate per hour = 12

Direct labour cost = 4 * 12 = 48

Overhead cost per unit = 16.78

Standard cost per unit = Direct material cost per unit + Direct labour cost per unit + Overhead cost per unit

= 1.863 + 48 + 16.78

= 66.643.

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