Question

Abba, Inc. has developed the following standards for one of its products: Direct materials - 1/2 pound at $6.00 per pound Direct labor - 1/4 hour at $20.00 per hour Variable overhead - 20% of direct labor cost Total fixed overhead is expected to be $15,000 and the company expects to produce 7,500 units. The standard cost card for this product would show a cost per unit of ______. $11.00 $8.00 $13.00 $9.00

Answer 1

The answer is $11 per unit.

The standard cost card for this product would show a cost per unit of $11.

Step-by-step explanation:

The workings are attached.

The formula used is as follows:

Standard cost per unit of a product = direct material per unit + direct labor per unit + variable overhead per unit + fixed overhead per unit.