Compute the Total Standard Cost Per Book for Publisher's Company

question 103

Multiple Choice

Compute the total standard cost per book for Publisher's Company using the following information: 1. Direct Materials: 1 ream of paper allowed per output unit manufactured, at $5.00 per ream.
2) Direct Mfg. Labour: 0.35 labour-hours of input allowed per output unit finished, at $17.50 standard cost per hour.
3) Variable Manufacturing Overhead: assigned on the basis of 0.25 per hour at $25 standard cost per hour per output unit finished.

• A) $11.13 per output unit
• B) $14.63 per output unit
• C) $17.38 per output unit.
• D) $47.50 per output unit

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Definitions:

Materials Price Variance

The difference between the actual cost of materials used in production and the expected cost under standard costing.

Raw Materials

Basic materials that are used in the production process of manufacturing goods, which are then converted into finished products.

Standard Cost

A predetermined cost of manufacturing, labor, and material as estimated in accordance with standards set by the company.

Direct Materials

These are raw materials that can be directly attributed to the production process of a product, such as steel for a car or flour for a bakery.