Ship CoProduces Storage Crates That Require 1

question 130

Multiple Choice

Ship Co.produces storage crates that require 1.2 meters of material at $.85 per meter and 0.1 direct labor hours at $15.00 per hour.Overhead is assigned at the rate of $9 per direct labor hour.What is the total standard cost for one unit of product that would appear on a standard cost card?

• A)$25.02.
• B)$11.52.
• C)$2.40.
• D)$2.52.
• E)$3.42.

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Definitions:

LIFO Method

An inventory valuation method that assumes the last items placed in inventory are the first sold, affecting cost of goods sold and inventory valuations on financial statements.

Costs Decreasing

A situation where the expenses associated with the production or operation of a business are reducing over time.

Lowest Net Income

Refers to the lowest amount of net income recorded by a company over a given period, demonstrating its worst financial performance phase.

LIFO Inventory Method

Last In, First Out, an accounting method where the most recently acquired items are the first to be sold or used.