Question

Exercise 21-7 Standard unit cost; cost variances LO P2 A manufactured product has the following information for August. Direct materials Direct labor Overhead Units manufactured Total manufacturing costs Standard 2 lbs. per unit @ $7.50 per lb. 0.5 hours per unit @ $56 per hour $72 per direct labor hour 14.00 $1.184,400 (1) Compute the standard cost per unit. (2) Compute the total budgeted cost for production in August (3) Compute the total cost variance for August. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the standard cost per unit. Direct materials Direct labor Overhead Total Red Required 2 >

Answer 1

(1) Standard cost per unit Direct materials Direct labor Overhead Total 15 (2 lbs * $ 7.50 per lb) 28 (0.50 hour* $ 56 per hour) 36 (0.50 hour* $ 72 per hour) 79 (2) Total budgeted cost $ 1,106,000 (14,000 units * $ 79) (Units manufactured * $ Standard cost per unit) ($ 1,106,000 - $ 1,104,400) (3) Cost variance $ 1,600 Favourable (Total budgeted cost - Total manufacturing costs)