Question

abba, inc. has developed the following standards for one of its products: direct materials - 1/2 pound at $6.00 per pound; direct labor - 1/4 hour at $20.00 per hour; variable overhead - 20% of direct labor cost. total fixed overhead is expected to be $15,000 and the company expects to produce 7,500 units. the standard cost card for this product will show a cost per unit of

Answer 1

If  the company expects to produce 7,500 units. the standard cost card for this product will show a cost per unit of  $11.00 per unit.

How to find the cost per unit?

Using this formula to find the Cost per unit

Cost per unit  = Direct materials + Direct labor + Variable overhead + (Fixed cost / Units produced)

Let plug in the formula

Cost per units = (1/2 x $6.00) + (1/4 x $20.00) + ($5.00 x 20%) + ($15,000/7,500)

Cost per unit = $3 + $5 +  $1+ $2

Cost per unit = $11.00 per unit

Therefore the cost per units is $11.

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