Question

Janitor Supply produces an industrial cleaning powder that requires 50 grams of material at $0.40 per gram and 0.15 direct labor hours at $14.00 per hour. Overhead is applied at the rate of $18 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?
a. $7.00.
b. $8.50.
c. $11.50.
d. $7.50.
e. $25.00.

Answer 1

Answer:

e. $25

Explanation:

Given the above information,

The first step is to calculate the cost of direct materials

Cost of direct materials = Material × Per gram rate

= 50 × $0.40

= $20

The next step is to compute the direct labor cost

Direct labor cost

= Direct labor rate × Direct labor hours

= $14 × 0.15

= $2.1

Then,

Overhead per unit cost = Overhead labor cost × labor hours

= $18 × 0.15

= $2.7

Now, add up the above costs

Total standard cost for one unit = $20 + $2.1 + $2.7

= $24.8

= $25