ShipCo. produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per h
our. Overhead is assigned 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? a. $25.02. b. $11.52. c. $2.40. d. $2.52. e. $3.42.
ShipCo. 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 assigned at the rate of $9 per direct labor hour.
Standard cost is the charge/cost to be budgeted to be incurred on a process, unit or manufacturing activity based on reliable estimates. The standard cost is usually compared with the actual cost after production has taken place.
It comprises of:
Direct material Cost : The standard quantity/unit of material to be used at a standard price.
Direct Labor Cost: The standard hours to be utilised at the standard rate for labour.
Overhead Cost: The estimated overhead fixed overhead charge and the variable overhead rate and the number of hours for applying the fixed and variable overhead rate.
Calculation
Material Cost = 1.2metres × $0.85 = $1.02
Labour Cost = 0.1 × $15 = $1.5
Overhead Cost = 0.1 × $9 = $0.90
Total Standard Cost = $[1.02 + 1.5 + 0.90] = $3.42
The supply of the product tend to be more inelastic when the prices of the goods are high. Supply inelasticity is caused by the sudden change of the price of goods needed to release the supply and more often than not, that change of price is a price hike; meaning, the increase of price reasonable or not.
The GDP includes all the final, finished and legal products produced in the country during a year.
The apples sold directly by the farmer to individual consumers and the apples the grocery store sells to households are both going to be included in the GDP.
The only apples not included in the GDP are the once sold to the company that produces apple juice, since they are intermediate goods and not finished goods.
Evaluative criteria are <em>when a consumer chooses a different product because of factors like value, cost, and functionality from the one they initially had in mind. </em>
It could take a little while for certain consumers to study and explore different goods before they purchase.
While some, just before they purchase, can make the decision automatically.
