Lolich Clothing manufactures a single style of designer jeans. Each pair is hand cut and hand sewn with unique designs. Production of each pair requires 2 yards of material, which costs $17 per yard, and requires 3 hours of direct labor. Direct labor costs $15 per hour; the variable overhead rate is $7 per direct labor hour; and the fixed overhead rate is $3.50 per direct labor hour.
What is the standard cost for each pair of designer jeans produced?
A) $42.50 per pair
B) $79.00 per pair
C) $100.00 per pair
D) $110.50 per pair
E) None of the above

Question

Quizplus · Accepted Answer

DM = $17 x 2 = $34.00 Variable overhead = $7 x 3 = $21.00
DL = $15 x 3 = $45.00 Fixed overhead = $3.50 x 3 = $10.50
Total standard cost = $110.50

Lolich Clothing Manufactures a Single Style of Designer Jeans