Custom Design Manufactures Baby Blankets by Turning a Client's Photograph

question 186

Essay

Custom Design manufactures baby blankets by turning a client's photograph of a new baby into a design printed on the blanket.This is a popular item, selling for $30, for new parents and grandparents.The following information has been provided by various units within Custom Design's departments.The company purchases fleece blankets in bundles of 100 at a price of $500 per bundle.Custom Design has to pay shipping charges of $10 per bundle.The process of transferring a picture onto a blanket costs $1.50.Each blanket is boxed in a cardboard box that costs $0.25 each.It takes one worker 15 minutes to prepare a blanket and transfer the picture onto the blanket and another worker 5 minutes to check the blanket for flaws in the printing and package the blanket.Workers are paid $15 per hour.Custom Design applies overhead at a rate of 120% of direct labor cost.
Required
Compute the standard cost of producing one blanket.