Question

Compute the standard cost for one hat, based on the following standards for each hat: Standard Material Quantity: 3/4 yard of fabric at $5.00 per yard Standard Labor: 2 hours at $5.75 per hour Factory Overhead: $3.20 per direct labor hour

Answer 1

Answer:

$21.65

Explanation:

The computation of the standard cost is shown below:

= Material cost + labor cost + factory overhead cost

where,

Material cost = 3 ÷ 4 × $5 per yard

                     = $3.75

Labor cost = 2 hours × $5.75 = $11.5

And, the factory overhead cost is

= $3.20 × 2 hours

= $6.4

So, the standard cost is

= $3.75 + $11.5 + $6.4

= $21.65