Question
Morton Companys variable manufacturing overhead should be $4.50 per standard direct labor-hour and fixed manufacturing should be $270,000 per year. The company manufactures a single
Morton Companys variable manufacturing overhead should be $4.50 per standard direct labor-hour and fixed manufacturing should be $270,000 per year. The company manufactures a single product that requires two direct labor-hours to complete. The direct labor wage rate is $15 per hour. Four feet of raw material are required for each unit of product; the standard cost of the material is $8.75 per foot. Although normal activity is 30,000 direct labor-hours each year, the company expects to operate at a 40,000-hour level of activity this year. Complete two standard cost cards as outlined below. Denominator Activity: 30,000 Direct Labor-Hours Direct materials, 4 feet at $8.75 per foot............ $35.00 Direct labor, ?................................................. ? Variable manufacturing overhead, ?.................. ? Fixed manufacturing overhead, ?...................... ? Standard cost per unit..................................... $ ? Denominator Activity: 40,000 Direct Labor-Hours Direct materials, 4 feet at $8.75 per foot..... $35.00 Direct labor, ?........................................... ? Variable manufacturing overhead, ?............. ? Fixed manufacturing overhead, ?................. ? Standard cost per unit................................ $ ?
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