Question

In addition to the information presented in Mini Exercises 14.1 and 14.2, ABC Company currently pays a standard rate of $1 per pound for raw materials. Each unit should be produced in 15 minutes of direct labor time at a standard direct labor rate of $12 per hour. Manufacturing overhead is applied at the standard rate of $16 per direct labor hour.
In Mini Exercise 14.1, ABC Company's budgeted sales for June, July, and August are 12,000, 16,000, and 14,000 units, respectively. ABC requires 30% of the next month's budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,600 units.
In Mini Exercise 14.2, In addition to the information presented in Mini Exercise 14.1, each unit that ABC Company produces uses 3 pounds of raw material. ABC requires 25% of the next month's budgeted production as raw material inventory each month.

Required:
Calculate the standard cost per unit for ABC Company.



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  • CreatedOctober 07, 2013
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