Question

J

anitor Supply produces an industrial cleaning powder that requires 22 grams of material at $0.10 per gram and 0.35 direct labor hours at $18.00 per hour. Overhead is applied at the rate of $17 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?

Multiple Choice

• $12.25.

• $28.10.

• $14.45.

• $8.50.

• $8.15.
  

  Fletcher Company collected the following data regarding production of one of its products. Compute the standard quantity allowed for the actual output.
  

  Direct materials standard (7 lbs. @ $4/lb.)	$	28		per finished unit
  Actual direct materials used		263,000		lbs.
  Actual finished units produced		37,000		units
  Actual cost of direct materials used	$	1,040,000

  Multiple Choice

• 263,000 pounds.

• 259,000 pounds.

• 37,000 pounds.

• 1,036,000 pounds.

• 148,000 pounds.

Answer 1

Standard quantity of materials per unit = 22 grams

Standard price of materials = $0.10 per gram

Standard time of labor per unit = 0.35

Standard rate of labor per hour = $18

Overhead rate = $17 per direct labor hour

Standard materials cost per unit = Standard quantity of materials per unit x Standard price of materials

= 22 x 0.10

= $2.2

Standard labor cost per unit = Standard time of labor per unit x Standard rate of labor per hour

= 0.35 x 18

= $6.3

Standard overhead cost per unit = Standard time of labor per unit x Overhead rate

= 0.35 x 17

= $5.95

Standard cost per unit = Standard materials cost per unit + Standard labor cost per unit + Standard overhead cost per unit

= 2.2+6.3+5.95

= $14.45 per unit

Third option is correct.

Part 2

Standard quantity for 1 unit = 7 pounds

Actual output = 37,000 units

Standard quantity allowed for actual output = Standard quantity for 1 unit x Actual output

= 7 x 37,000

= 259,000 pounds

Second option is correct.