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Leather Saddle Company Leather Saddle Company has a standard cost system and has set the following standards for materials and labour: Leather (10 strips @

Leather Saddle Company

Leather Saddle Company has a standard cost system and has set the following standards for materials and labour:

Leather (10 strips @ $25 per strip) $250 Direct labour (15 hours @ $20 per hour) 300 Total prime cost $550

During the year, the company produced 100 saddles. Actual leather purchased was 1,300 strips at $32 per strip. There were no beginning or ending inventories of leather.

Actual direct labour was 2,000 hours at $16 per hour.

Refer to Leather Saddle Company. What is the standard cost of leather for the production of 100 saddles?

$13,000
$21,000
$25,000
$30,000

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