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Kansas Company uses a standard cost accounting system. In 2014, the company produced 28,000 units. Each unit took several pounds of direct materials and 1.6 standard hours of direct labor at a standard hourly rate of $11.00. Normal capacity was 50,170 direct labor hours. During the year, 131,400 pounds of raw materials were purchased at $0.93 per pound. All materials purchased were used during the year.

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Explanation / Answer

Standard hours per unit = 1.60 Hours

Units produced = 28000

Total standard hours allowed = 28000 * 1.60 = 44800 hours