Operating at a normal level of 24,000 direct labor-hours, Trone Company produces 8,000 units of product. The direct labor wage rate is $12.60 per hour. Two pounds of raw materials go into each unit of product at a cost of $4.20 per pound. A flexible budget is used to plan and control overhead costs:

Required:
1. Using 24,000 direct labor-hours as the denominator activity, compute the predetermined overhead rate and break it down into fixed and variable elements.
2. Complete the standard cost card below for one unit of product:
Direct materials, 2 pounds at $4.20 per pound . . . . . . . $8.40
Direct labor, ? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Variable overhead, ?. . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Fixed overhead, ?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Total standard cost per unit . . . . . . . . . . . . . . . . . . . . . . $ ?

Transcribed Image Text:

Flexible Budget Data Cost Formula (per direct Direct Labor-Hours Overhead Costs labor-hour) 20,000 22,000 24,000 S1.60 32,000 S 35,200 38,400 Fixed cost Total overhead cost 84,000 84,000 84,000 $116,000 $119,200 $122,400