Question

Bramble’s standard quantities for 1 unit of product include 2 pounds of materials and 2.5 labor hours. The standard rates are $6 per pound and $11 per hour. The standard overhead rate is $12 per direct labor hour. The total standard cost of Bramble’s product is

Answer 1

The standard cost of Bramble's product is $69.5 per unit.

Explanation:

We can calculate the standard cost per unit of Bramble's product as the sum of the material cost, direct labor cost and overhead cost.

Each unit of product uses 2 pounds of materials, that cost $6 per pound. So the material cost is:

`MC=2\,lb/u\cdot6\,\$/lb=12\,\$/u`

Each unit needs 2.5 direct labor hours, and they have a cost of $11 per hour, so the direct labor cost is:

`LC=2.5\,h/u\cdot11\,\$/h=27.5\,\$/u`

The overhead costs are calculated in this case as $12 per direct labor hour. As 2.5 labor hours are needed per unit, we have:

`OC=2.5\,h/u\cdot 12\,\$/h=30\,\$/u`

The standard cost is then:

`C=MC+LC+OC=12+27.5+30=69.5\,\$/u`