After the first 3 months of operation, the company determines the following
costs for the two products they produce:
				Product A		Product B
Labor Hours			4.00		3.00
Wage paid per hour			$ 12.00		$ 18.00
Materials items used per unit			2.50		1.50
Cost per item of material			$ 70.00		$ 50.00
Show your work in answering each question
1. What is the labor cost per unit for each product?
2. What is the material cost per unit for each product?
3. What is the total cost per unit for each product?

Standard Costs

Labor

Materials

Items per unit of product

3.00

hrs

5.00

Rate Per Item

$ 30.00

$ 60.00

Variable Cost Per Unit

$ 90.00

$ 300.00

During the period, the company produces 1,400 units. The company attempted a new process asking

employees to spend extra time to reduce material waste. The employees spent 3.5 hours per unit but

did reduce the materials used to 4.8 per unit. Materials purchase cost and hourly wage were at standard cost.

1. What was the total cost of production? Show your work.

2. What was the total savings or cost compared to standard cost for labor, materials and in total?

Show on a per unit and total dollar basis. Show your work.