RHO Company began its operations on January 1 and produces a single product that sells for $10.25 per unit.Standard capacity is 80,000 units per year.The 80,000 units were produced and 70,000 units were sold during the year. Manufacturing costs and selling and administrative expenses follow: What is the standard cost of manufacturing a unit of product?

Question

RHO Company began its operations on January 1 and produces a single product that sells for $10.25 per unit.Standard capacity is 80,000 units per year.The 80,000 units were produced and 70,000 units were sold during the year. Manufacturing costs and selling and administrative expenses follow:  What is the standard cost of manufacturing a unit of product?

Quizplus · Accepted Answer

The standard capacity is 80,000 units and the total manufacturing costs are $520,000, so the standard cost of manufacturing a unit of product is:
$520,000 / 80,000 = $6.50 per unit
Therefore, the best choice is B, which is the closest option to $6.50.

RHO Company Began Its Operations on January 1 and Produces