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26 March, 07:05

Ship Co. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is applied at the rate of $9 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?

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  1. 26 March, 07:30
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    Standard cost = $3.42

    Explanation:

    Giving the following information:

    Ship Co. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour. Overhead is applied at the rate of $9 per direct labor hour.

    To calculate the standard cost we need to use the following formula:

    Standard cost = standard direct material + standard direct labor + allocated overhead

    Standard cost = 1.2*0.85 + 0.1*15 + 9*0.1

    Standard cost = $3.42
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