Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Computing and Using Standard Costs Modular houses are Homes, Inc.'s specialty. The company's best-selling model is a three-bedroom, 1,400-square-foot house with an impressive front entrance.

Computing and Using Standard Costs Modular houses are Homes, Inc.'s specialty. The company's best-selling model is a three-bedroom, 1,400-square-foot house with an impressive front entrance. Last year, the standard costs for the six basic direct materials used in manufacturing the entrance were as follows: wood framing materials, $2,140; deluxe front door, $480; door hardware, $260; exterior siding, $710; electrical materials, $580; and interior finishing materials, $1,520. Three types of direct labor are used to build the entrance: carpenter, 30 hours at $36 per hour; door specialist, 4 hours at $24 per hour; and electrician, 8 hours at $50 per hour. Last year, the company used an overhead rate of 40 percent of total direct materials cost.

This year, the cost of wood framing materials is expected to increase by 20 percent, and a deluxe front door will cost $496. The cost of the door hardware will increase by 10 percent, and the cost of electrical materials will increase by 20 percent. Exterior siding cost should decrease by $15 per unit. The cost of interior finishing materials is expected to remain the same. The carpenter's wages will increase by $1 per hour, and the door specialist's wages should remain the same. The electrician's wages will increase by $0.50 per hour. Finally, the overhead rate will decrease to 30 percent of total direct materials cost.

1. Compute the total standard cost of direct materials per entrance for last year. $ per entrance

2. Using your answer to the previous requirement, compute the total standard unit cost per entrance for last year. $ per entrance

3. Compute the total standard unit cost per entrance for this year.

Step by Step Solution

3.55 Rating (159 Votes )

There are 3 Steps involved in it

Step: 1

1 Calculating Total standard cost of direct material Wood framing materials 214000 Deluxe front door 48000 Door hardware 26000 Exterior siding 71000 E... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Document Format ( 2 attachments)

PDF file Icon
60902a10d6495_21526.pdf

180 KBs PDF File

Word file Icon
60902a10d6495_21526.docx

120 KBs Word File

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles of Accounting

Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson

12th edition

978-1133603054, 113362698X, 9781285607047, 113360305X, 978-1133626985

More Books

Students also viewed these Accounting questions

Question

Can a company have a negative financing period?

Answered: 1 week ago