Question

Standard Product Cost

Sana Rosa Furniture Company manufactures designer home furniture. Sana Rosa uses a standard costsystem. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:

Direct labor:	standard rate	$20.00 per hr.
	standard time per unit	2.00 hrs.
Direct materials (oak):	standard price	$9.50 per bd. ft.
	standard quantity	17 bd. ft.
Variable factory overhead:	standard rate	$2.80 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 dining room table

b. A standard cost system provides Rosa Furniture management a cost control tool using the principle of . Using this principle, cost deviations from standards can be investigated and corrected.

Answer 1

Solution:

a. Determine the standard cost per dining room table. If required, round your answer to two decimal places.

Details	Amount($)
Direct materials per unit ($9.50*17)	$161.5
Dierect labor per unit($20.00*2.00)	$40.00
Fixed manufacturing overhead per unit ($1.20*2.00)	$2.4
Variable factory overhead per unit ($2.80*2.00)	$5.6
Standard cost per dining room table	$209.5

.

b. A standard cost system provides Rosa Furniture management a cost control tool using the principle of Cost control. Using this principle, Major cost deviations from standards can be investigated and corrected.