Question

Marley Office Goods budgeted 12,000 and produced 11,000 tape dispensers during June. Resin used to make the dispensers is purchased by the pound. Standards and actual costs follow for June: Standard Actual Materials 2 pounds @ $5.00 a pound 20,900 pounds @ $4.90 a pound Labor .25 hours @ $15.00 per hour 2,700 hours @ $15.30 per hour Variable Overhead $3.25 per dispenser $36,500 Fixed Overhead $1.50 per dispenser $17,250 How much is the standard cost of one tape dispenser?

Answer 1

$18.50 per dispenser

Step-by-step explanation:

The computation of the standard cost for one tape dispenser would be

= Material + labor + variable overhead + fixed overhead

where,

Material = 2 pounds × $5 per pound = $10

Labor = 0.25 pounds × $15 per pound = $3.75

Variable overhead = $3.25

And, the fixed overhead = $1.50

So, the standard cost would be

= $10 + $3.75 + $3.25 + $1.50

= $18.50 per dispenser