Ship Co. 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 applied 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) $2.40.
B) $3.42.
C) $11.52.
D) $25.02.
E) $2.52.

Question

Quizplus · Accepted Answer

Standard cost per unit = (direct material cost + direct labor cost + overhead cost)
Direct material cost = 1.2 meters x $0.85/meter = $1.02
Direct labor cost = 0.1 hours x $15.00/hour = $1.50
Overhead cost = 0.1 hours x $9/hour = $0.90
Standard cost per unit = $1.02 + $1.50 + $0.90 = $3.42. Therefore, the correct choice is B.

Ship Co Produces Storage Crates That Require 1