Kimmel Accounting, be RACK Exercise 23-1 Parsons Company is planning to produce

Question

Kimmel Accounting, be RACK Exercise 23-1 Parsons Company is planning to produce 1,900 units of product in 2017. Each unit requires 2.20 pounds of materials at $6.80 per pound and a half-hour of labor at $14.00 per hour. The overhead rate is 40% of direct labor. Compute the budgeted amounts for 2017 for direct materials to be used, direct labor, and applied overhead. Direct materials Direct labor Overhead Compute the standard cost of one unit of product. (Round answer to 2 decimal places,e.g.2.75.) Standard cost Click if you would like to Show Work for this question: Open Show Work

Explanation / Answer

(a)

(b)

Standard cost = Direct Materials + Direct Labour + Overhead

= (1*2.2*6.8) + (1*0.5*14) + (1*0.5*14*40%)

= 14.96 + 7 + 2.8

= 24.76

Direct Materials 28,424 (1,900*2.2*6.8) Direct labour 13,300 (1,900*0.5*14) Overhead 5,320 (13,300*40%)

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