Standard Product Cost

Sana Rosa Company manufactures unfinished home furniture. Sana Rosa uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:

Direct labor:	standard rate	$18.00 per hr.
	standard time per unit	3.5 hrs.
Direct materials (oak):	standard price	$8.00 per bd. ft.
	standard quantity	20 bd. ft.
Variable factory overhead:	standard rate	$2.80 per direct labor hr.
Fixed factory overhead:	standard rate	$1.20 per direct labor hr.

a. Determine the standard cost per dining room table. If required, round your answer to two decimal places. $fill in the blank 1per table

b. A standard cost system provides Sana Rosa management a cost control tool using the principle of

cost controlmanagement by exceptionmanagement by exception

. Using this principle,

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cost deviations from standards can be investigated and corrected.

Feedback

Remember the process discussed in chapter for calculating standard cost.

Review the benefits of standard cost systems.

Learning Objective 2.