The standard operating capacity of Tecate Manufacturing Co. is 1,000 units. A detailed study of the manufacturing data relating to the standard production cost of one product revealed the following: Two pounds of materials are needed to produce one unit. Standard unit cost of materials is $8 per pound. It takes one hour of labor to produce one unit. Standard labor rate is $10 per hour. Standard overhead (all variable) for this volume is $4,000. All of the deviations listed in E8-1 and E8-2 took place, and 1,100 units were started and finished. a. Set up a standard cost summary showing the standard unit cost. Materials$ 16 Labor 10 Factory overhead 4 Standard unit cost$ 30 b. Analyze the variances for materials and labor. Use "F" and "U" to designate favorable and unfavorable variances. Enter all amounts as positive numbers. Materials price variance$ 1000 Materials quantity variance$ 800 Labor rate variance$ 200 Labor efficiency variance$ 1000

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Calculation of standard unit cost Direct Material 2 x 8 16 per unit Di... View the full answer