Cintron Company produces high-quality leather belts. The Boise plant uses a stan

Question

Cintron Company produces high-quality leather belts. The Boise plant uses a standard costing system with the following standards for materials (leather strips) and direct labor.

There are no beginning or ending inventories for direct materials.

For direct labor, what is the total cost that should be incurred?

Standard Prices     Price per Leather Strip (Direct Materials) $ 3     Price per Labor Hour $ 13 July Data Number of Belts Produced 25,151 Number of Leather Strips Purchased 108,033 Number of Labor Hours Used 21,073 Actual Cost per Leather Strip $ 4 Actual Cost per Labor Hour $ 11 Standard Quantity of Materials Allowed (given production) 95,795     Standard Quantity of Labor Allowed (given production) 17,512

Explanation / Answer

Standard Cost = Standard Price per Hour x Standard Hours required for actual production

= 13 x 17512

= 227656

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