Question

Given the following, the standard cost of this item is $_____ per unit. (Enter your answer as a whole number.)

Direct materials per unit: 2 pounds
Direct material cost: $2.50 per pound
Direct labor per unit: 0.75 hours
Direct labor rate: $16.00 per hour
Variable overhead rate: $8.00 per hour

Answer 1

To calculate the standard cost per unit, you add up the costs of direct materials, direct labor, and variable overhead. The calculation yields a total standard cost of $23 per unit for the item in question.

Step-by-step explanation:

The student has asked for the calculation of the standard cost per unit for an item, considering the direct materials, direct labor, and variable overhead rate. To calculate this:

1. Multiply the amount of direct materials needed per unit by the cost per pound of the material: 2 pounds × $2.50 per pound = $5.
2. Multiply the direct labor hours per unit by the labor rate: 0.75 hours × $16.00 per hour = $12.
3. Multiply the labor hours per unit by the variable overhead rate: 0.75 hours × $8.00 per hour = $6.
4. Add all these amounts to get the total standard cost per unit: $5 + $12 + $6 = $23 per unit.

Therefore, the standard cost of this item is $23 per unit.