Question

Given the following, the standard cost of this item is $
per unit. (Enter your answer as a whole number.)







Direct materials per unit

2 pounds

Direct material cost

$2.50 per pound

Direct labor per unit

.75 hours

Direct labor rate

$16.00 per hour

Variable overhead rate

$8.00 per hour

Answer 1

To calculate the standard cost per unit, we need to account for the costs of direct materials, direct labor, and variable overhead. Let's break it down step by step.

### 1. Direct Materials Cost
- Direct materials per unit: 2 pounds
- Direct material cost: $2.50 per pound

\[
\text{Direct Materials Cost} = \text{Direct Materials per unit} \times \text{Direct material cost}
\]
\[
= 2 \text{ pounds} \times 2.50 \text{ dollars/pound} = 5.00 \text{ dollars}
\]

### 2. Direct Labor Cost
- Direct labor per unit: 0.75 hours
- Direct labor rate: $16.00 per hour

\[
\text{Direct Labor Cost} = \text{Direct labor per unit} \times \text{Direct labor rate}
\]
\[
= 0.75 \text{ hours} \times 16.00 \text{ dollars/hour} = 12.00 \text{ dollars}
\]

### 3. Variable Overhead Cost
- Variable overhead rate: $8.00 per hour
- Since direct labor per unit is 0.75 hours, we will use this for calculating variable overhead.

\[
\text{Variable Overhead Cost} = \text{Direct labor per unit} \times \text{Variable overhead rate}
\]
\[
= 0.75 \text{ hours} \times 8.00 \text{ dollars/hour} = 6.00 \text{ dollars}
\]

### 4. Total Standard Cost per Unit
Now we can calculate the total standard cost per unit by summing up the costs calculated above.

\[
\text{Total Standard Cost} = \text{Direct Materials Cost} + \text{Direct Labor Cost} + \text{Variable Overhead Cost}
\]
\[
= 5.00 + 12.00 + 6.00 = 23.00 \text{ dollars}
\]

Thus, the standard cost of this item is **$23.00** per unit.