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Standard Product Cost Sana Rosa Company manufactures unfinished home furniture. Sana Rosa uses a standard...

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Accounting

  1. Standard Product Cost

    Sana Rosa Company manufactures unfinished home furniture. Sana Rosa uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:

    Direct labor: standard rate $18.00 per hr.
    standard time per unit 3.5 hrs.
    Direct materials (oak): standard price $8.00 per bd. ft.
    standard quantity 20 bd. ft.
    Variable factory overhead: standard rate $2.80 per direct labor hr.
    Fixed factory overhead: standard rate $1.20 per direct labor hr.

    a. Determine the standard cost per dining room table. If required, round your answer to two decimal places. $fill in the blank 1per table

    b. A standard cost system provides Sana Rosa management a cost control tool using the principle of

    cost controlmanagement by exceptionmanagement by exception

    . Using this principle,

    majorminormajor

    cost deviations from standards can be investigated and corrected.

    Feedback

    Remember the process discussed in chapter for calculating standard cost.

    Review the benefits of standard cost systems.

    Learning Objective 2.

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