Question

Diaz Company has developed the following standards for one of its products:Direct materials 3.50 pounds × $4 per poundDirect labor 1 hour × $12 per hourVariable manufacturing overhead 1 hour × $6 per hourThe following activity occurred during the month of April:Materials purchased 2,000 pounds costing $22,500Materials used 1,600 poundsUnits produced 250 unitsDirect labor 550 hours at $12.50 per hourActual variable manufacturing overhead: $2,500The company records materials price variances at the time of purchase.The total variable standard cost is:_______

Answer 1

Answer:

$8000

Explanation:

Total variable cost per unit (standard):

= Direct materials + Direct labor + Variable manufacturing overhead

= [3.5 pounds × $4 per pound] + [1 hour × $12 per hour] + [1 hour × $6 per hour]

= $14 + $12 + $6

= $32 per unit

Total variable standard cost:

= Per unit cost × Units produced

= $32 × 250

= $8000