Question
Erie Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been
Erie Company manufactures a small mp3 player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate mp3 player are as follows: |
Standard Hours | Standard Rate per Hour | Standard Cost |
27 minutes | $5.40 | $2.43 |
During August, 9,425 hours of direct labor time were needed to make 19,700 units of the Jogging Mate. The direct labor cost totaled $49,010 for the month. |
Required: | |
1. | According to the standards, what direct labor cost should have been incurred to make 19,700 units of the Jogging Mate? By how much does this differ from the cost that was incurred? (Round Standard labor time per unit to 2 decimal places.) |
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