Operating at a normal level of 28,000 direct labor-hours, Lasser Company produce
ID: 2415246 • Letter: O
Question
Operating at a normal level of 28,000 direct labor-hours, Lasser Company produces 14,000 units of product each year. The direct labor wage rate is $11.00 per hour. Two and one-half yards of direct materials go into each unit of product; the material costs $9.4 per yard. Variable manufacturing overhead should be $2.40 per standard direct labor-hour. Fixed manufacturing overhead should be $151,200 per period.
Using 28,000 direct labor-hours as the denominator activity, compute the predetermined overhead rate and break it down into variable and fixed elements. (Round your answers to 2 decimal places.)
Complete the standard cost card below for one unit of product: (Round your intermediate calculations and final answers to 2 decimal places.)
Operating at a normal level of 28,000 direct labor-hours, Lasser Company produces 14,000 units of product each year. The direct labor wage rate is $11.00 per hour. Two and one-half yards of direct materials go into each unit of product; the material costs $9.4 per yard. Variable manufacturing overhead should be $2.40 per standard direct labor-hour. Fixed manufacturing overhead should be $151,200 per period.
Explanation / Answer
Predetermined overhead rate = $151,200/28,000
= $5.40
total overhead rate = $5.40 + $2.40 = $7.80 per unit
Variable element = $2.40 per hour
Fixed element = $5.40 per hour
STandard
cost
Direct material 2.5 *9.40 $23.50 Direct labor 11*.5 hrs per unit 5.50 Variable 2.40 *.5 1.20 Fixed 5.4*.5 2.70 total standard cost per unit $32.90Related Questions
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