Question

Given the following, compute the standard cost per widget.







Direct materials per unit

4 pounds

Direct material cost

$1.25 per pound

Direct labor per unit

1.5 hours

Direct labor rate

$10.00 per hour

Variable overhead rate

$4.00 per hour





Multiple choice question.

$24.00


$20.00


$26.00


$21.00

Answer 1

To calculate the standard cost per widget, we need to consider the costs associated with direct materials, direct labor, and variable overhead.

### Step 1: Calculate Direct Material Cost
- Direct materials per unit: 4 pounds
- Direct material cost: $1.25 per pound

\[
\text{Direct Material Cost} = \text{Direct materials per unit} \times \text{Direct material cost}
= 4 \text{ pounds} \times \$1.25/\text{pound} = \$5.00
\]

### Step 2: Calculate Direct Labor Cost
- Direct labor per unit: 1.5 hours
- Direct labor rate: $10.00 per hour

\[
\text{Direct Labor Cost} = \text{Direct labor per unit} \times \text{Direct labor rate}
= 1.5 \text{ hours} \times \$10.00/\text{hour} = \$15.00
\]

### Step 3: Calculate Variable Overhead Cost
- Variable overhead rate: $4.00 per hour

\[
\text{Variable Overhead Cost} = \text{Direct labor per unit} \times \text{Variable overhead rate}
= 1.5 \text{ hours} \times \$4.00/\text{hour} = \$6.00
\]

### Step 4: Compute the Total Standard Cost per Widget
\[
\text{Total Standard Cost} = \text{Direct Material Cost} + \text{Direct Labor Cost} + \text{Variable Overhead Cost}
\]
\[
= \$5.00 + \$15.00 + \$6.00 = \$26.00
\]

The standard cost per widget is **$26.00**.

### Final Answer:
- **$26.00**