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Item Standard cost $ amount Variable overhead...

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Question

Accounting

Item

Standard cost

$ amount

Variable overhead

0.6 hr @ $8.00/hour

$4.80

Fixed overhead

0.9 hr @ $4.00/hour

3.60

Direct materials

2.0 kg@ $3.25/kg

6.50

Direct labour

0.7 hr @ $12.50/hour

8.75

Standard cost per unit

$23.65

During the last fiscal year ended December 31, 2021, Kapahulu reported the following information in connection with the production of this table lamp:

1. Actual VOH incurred: $494,000

2. Actual FOH incurred: $344,000

3. Production: 100,000 units

4. Direct material purchases: 210,000 kg at $3.05/kg

5. Beginning inventory of direct material: 18,000 kg (carried at standard cost).

6. Total direct labour used: 71,000 hours, at a cost of $923,000

No ending inventory

The companys factory can produce 120,000 table lamps a year but a denominator level was set at 90,000 units for the year ended December 31, 2022. Cost driver is direct labour hours.

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