Computing a Total Standard Unit Cost Weather Balloons, Inc., makes reusable weat

Question

Computing a Total Standard Unit Cost

Weather Balloons, Inc., makes reusable weather-detecting balloons. Because of a recent recession, management has ordered that standard costs be recomputed. New direct materials price standards are $600 per set for electronic components and $13 per square meter for heavy-duty canvas. Direct materials quantity standards include one set of electronic components and 100 square meters of heavy-duty canvas per balloon. Direct labor time standards are 26 hours per balloon for the Electronics Department and 21 hours per balloon for the Assembly Department. Direct labor rate standardsare $20 per hour for the Electronics Department and $15 per hour for the Assembly Department. Standard overhead rates are $18 per direct labor hour for the standard variable overhead rate and $10 per direct labor hour for the standard fixed overhead rate.

Using these production standards, compute the total standard unit cost of one weather balloon.
$ _____ per balloon

Explanation / Answer

the total standard unit cost of one weather balloon:

S.Direct Material: one set for electronic components =$600

Heavy duty canvas = 100 *13 = $1300

S.Direct Labor: Electronics Department= 26 * $20 = $520

  Assembly Department= 21 * $15 = $315

Standard over head: Variable = (26 + 21) * 15 = $705

Fixed = (26 + 21) * 10 = $470   

total standard per ballon cost = $3910   

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