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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?

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Answer:

Standard cost= $3.42

Explanation:

Giving the following information:

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.

To calculate the standard cost we need to use the following formula:

Standard cost= standard direct material + standard direct labor + allocated overhead

Standard cost= 1.2*0.85 + 0.1*15 + 9*0.1

Standard cost= $3.42

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