Industries manufacture a Redwing reconnaissance drone. The following information pertains to its manufacturing costs. To make one
Question:
Industries manufacture a Redwing reconnaissance drone. The following information pertains to its manufacturing costs.
To make one redwing unit it takes 2 pounds of titanium and 0.5 pounds of carbon fiber. The company expects 0.01 pounds of waste for titanium and 0.02 waste for carbon fiber materials. Titanium costs are anticipated at $10.25 per pound and carbon fiber costs are anticipated at $5.25 per pound. A 1% discount is offered to EXO-7 Industries from its suppliers.
The redwing unit requires two labor processes to complete it -assembly and programming. Assembly laborers are paid $17 per hour and programming laborers are paid $27 per hour. Fringe benefits and payroll taxes for assembly and programming laborers amount to $1.75 and $5.25 per hour, respectively. Based on the company’s experience and research, it expects to use 5.0 hours of assembly and 10 hours of programming. The company uses direct labor hours as its base for allocating overhead costs. The estimated variable overhead rate per hour is $12 and the estimated fixed overhead rate per hour is $30.
Required: Prepare a standard cost card to help the company calculate the standard cost per redwing. Round amounts to two decimal places if necessary.
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old