Larkin Company accumulated the following standard cost data concerning product I-Tal. Direct materials per unit: 3.30 pounds at $6.10 per pound Direct labor per unit: 2.70 hours at $12 per hour Manufacturing overhead: Allocated based on direct labor hours at a predetermined rate of $21.60 per direct labor hour Compute the standard cost of one unit of product I-Tal.

$110.85

Explanation:

Standard Cost is the budgeted cost that business estimates to be for the a specific period. Actual cost may be difference from the standard cost.

Calculate each cost per unit

Direct Material cost = 3.3 pound x $6.10 = $20.13 per unit

Direct labor cost = 2.7 hours x $12 = $32.4 per unit

Overhead applied rate = 2.7 hours x $21.6 = $58.32 per unit

Now add all the costs to define product cost

Total cost per unit = $20.13 + $32.4 + $58.32 = $110.85

The standard cost is $110.85 per unit

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