Standard Product CostAtlas Furniture Company manufactures designer home furniture. Atlas 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$26.00 per hr. standard time per unit3 hrs.Direct materials (oak):standard price$9.00 per bd. ft. standard quantity15 bd. ft.Variable factory overhead:standard rate$2.40 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.? (per table)

Standard cost per dining room table = Standard Material cost + Standard labor cost + Standard variable factory overhead cost + Standard Fixed Factory overhead cost1. Standard labor cost = 3 hours x $26 per hours = $78 per dining room table Standard Material cost = 15 bd ft. x $9 per bd ft. = $135 per dining room table Standard variable factory overhead = 3 hours x $2.40 per hours = $7.20 per dining room table Standard Fixed factory overhead = 3 hours x $1.20 per hours = $3.60 per dining room table Standard cost per dining room table = $78 + $135 + $7.20 + $3.60 = $223.80

Answered: Atlas Furniture Company manufactures…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Standard Product Cost

Atlas Furniture Company manufactures designer home furniture. Atlas 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	$26.00 per hr.
	standard time per unit	3 hrs.
Direct materials (oak):	standard price	$9.00 per bd. ft.
	standard quantity	15 bd. ft.
Variable factory overhead:	standard rate	$2.40 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.

? (per table)

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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