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"A company uses the following standard costs to produce a single unit of output:

Direct materials: 8 pounds at $1.00 per pound = $8.00
Direct labor: 0.4 hour at $9.00 per hour = $3.60
Manufacturing overhead: $X per unit

Calculate:

A) The total standard cost per unit.
B) The value of the manufacturing overhead per unit (X).

1 Answer

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Final answer:

The total standard cost per unit is the sum of direct materials, direct labor, and manufacturing overhead costs. However, the manufacturing overhead cost (X) per unit cannot be calculated without the total standard cost per unit or additional information. An understanding of average and marginal costs is also beneficial for analyzing costs.

Step-by-step explanation:

To calculate the total standard cost per unit of a product, we must sum the costs of direct materials, direct labor, and manufacturing overhead. In this case, we know the direct materials cost $8.00 and the direct labor costs $3.60 per unit. However, the manufacturing overhead (X) per unit is not provided.

Calculating Total Standard Cost Per Unit

The total standard cost per unit is given by the formula:

Direct Materials Cost ($8.00)

Direct Labor Cost ($3.60)

Manufacturing Overhead Cost (X)

Total Standard Cost Per Unit = Direct Materials Cost + Direct Labor Cost + Manufacturing Overhead Cost

Calculating Manufacturing Overhead per Unit (X)

If we had the total standard cost per unit, we could rearrange the formula to solve for X:

Manufacturing Overhead Cost (X) = Total Standard Cost Per Unit - Direct Materials Cost - Direct Labor Cost

Without the total standard cost or additional information about X, we cannot determine the exact value for the manufacturing overhead per unit. Therefore, to find the value of X, you would need the total standard cost per unit provided by the company.

Also, it's useful to understand concepts like average cost and marginal cost when analyzing costs. Average cost (AC) is defined as the total cost (TC) divided by the quantity of output produced (Q), while marginal cost (MC) is the change in total cost (ATC) divided by the change in output (AQ). These concepts help us understand cost behaviors in a production environment.

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