Hofburg's standard quantities for 1 unit of product include 2 pounds of materials and 1.5 labor hours. The standard rates are $2 per pound and $7 per hour. The standard overhead rate is $8 per direct labor hour. The total standard cost of Hofburg's product is
A) $14.50.
B) $17.00.
C) $22.50.
D) $26.50.

Question

Quizplus · Accepted Answer

The total standard cost includes materials, labor, and overhead. Materials cost is 2 pounds x $2 = $4. Labor cost is 1.5 hours x $7 = $10.5. Overhead is 1.5 hours x $8 = $12. Total standard cost is $4 + $10.5 + $12 = $26.50.

Hofburg's Standard Quantities for 1 Unit of Product Include 2