Blue Horizon Clothing Company produces men's shirts. During May, the company's records revealed the following information about production of the shirts.
Standards:
Direct materials 5 metres @ $2.50 per metre
Direct labour 1 hour @ $7.50 per hour
Manufacturing overhead:
Variable $9.50 per direct labour hour
Fixed $10.00 per ½ hour of direct labour
Compute the standard unit cost for a shirt.

Question

Quizplus · Accepted Answer

Standard unit cost = Direct materials + Direct labour + Manufacturing overhead= (5 x $2.50) + (1 x $7.50) + (1 x $9.50) + (1 x $10.00)= $12.50 + $7.50 + $9.50 + $10.00= $34.50

Blue Horizon Clothing Company Produces Men's Shirts