The Peacock Company manufactures fishing rods and reels. The company uses a stan

Question

The Peacock Company manufactures fishing rods and reels. The company uses a standard cost system. The direct labor, direct materials and factory overhead for the model #345 commercial fishing rod and reel are as follows:

Determine the standard cost of the model #345 fishing rod and reel. Round the answer to nearest whole cent.

Direct labor: Standard rate is $8 per hour
Standard time per unit is 1.5 hours Direct materials: Standard price is $1 per linear foot
Standard quantity is 5 linear feet Variable factory overhead: Standard rate is $10.50 per direct labor hour Fixed factory overhead: Standard rate is $0.50 per direct labor hour

Explanation / Answer

direct labour=8*1.5=12

direct material=1*5=5

variable overhead=10.5*15=15.75

fixed=0.50*1.5=0.75

standard cost=12+5+15.75+0.75=$33.5

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