Question
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
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 | $24.00 per hr. |
standard time per unit | 4 hrs. | |
Direct materials (oak): | standard price | $11.00 per bd. ft. |
standard quantity | 15 bd. ft. | |
Variable factory overhead: | standard rate | $2.80 per direct labor hr. |
Fixed factory overhead: | standard rate | $0.80 per direct labor hr. |
a. Determine the standard cost per dining room table. If required, round your answer to two decimal places. $per table
b. A standard cost system provides Sana Rosa management a cost control tool using the principle of management by exception . Using this principle, major cost deviations from standards can be investigated and corrected.
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