Question

Standard Product Cost Sana Rosa Furniture Company manufactures designer home furniture. Sana Rosa uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows: Direct labor: standard rate $25.00 per hr. standard time per unit 3.50 hrs. Direct materials (oak): standard price $9.00 per bd. ft. standard quantity 16 bd. ft. Variable factory overhead: standard rate $2.40 per direct labor hr. Fixed factory overhead: standard rate $0.80 per direct labor hr. a. Determine the standard cost per dining room table. If required, round your answer to two decimal places. per dining room table $ b. A standard cost system provides Rosa Furniture management a cost control tool using the principle of cost deviations from standards can be investigated and corrected. sing the principle of Using this principle, using this principle,

Answer 1

a. Standard cost = Direct material + direct labor + variable overhead + Fixed overhead

= 9*16+25*3.50+2.40*3.50+0.80*3.50

= $242.70 per dining room table

b. A standard cost system provides Sana Rosa management a cost control tool using the principle of "Cost Control". Using this principle, "major" cost deviations from standards can be investigated and corrected.