Exercise 23-1

Parsons Company is planning to produce2,700units of product in 2017. Each unit requires3.60pounds of materials at $7.20per pound and a half-hour of labor at $16.00per hour. The overhead rate is60% of direct labor.

(a)

Compute the budgeted amounts for 2017 for direct materials to be used, direct labor, and applied overhead.

Direct materials	$
Direct labor	$
Overhead	$

(b)

Compute the standard cost of one unit of product.(Round answer to 2 decimal places, e.g. 2.75.)

Standard cost

$