Question

# Standard Product Cost Sana Rosa Furniture Company manufactures designer home furniture. Sana Rosa uses a standard...

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.

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.