The Summerchew Company, recognizing that chewing gum has an adverse effect on the consumers' teeth and that chewing tobacco is gross, has developed a chewing product from kale. Standard costs for 1,000 lbs. of chewing kale are as follows: Direct Materials: Kale Elasticizer syrup Flavor disguiser Input *Weighted average. Labor: Quantity 600 Price $1.00 200 $0.80 Cost $600 160 200 $2.20 440 1,000 lbs Producing 1,000 pounds of finished product requires 20 hours at $18.00 per hour or $0.36 per lbs. of finished product. Overhead: Variable OH is estimated to be $5 per direct labor hour or $0.10 per pound. $1,200 = $1.20 per lb.* For fixed OH, the company has budgeted sales and production of 420,000 pounds of kale chew and $210,000 of fixed overhead ($17,500 per month). As a result, the company's standard cost of fixed OH is $25 per labor hour or $0.50 per pound.