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Ship Co. produces storage crates that require 27.0 meters of material at $0.20 per meter and 0.40 direct labor hours at $18.00 per hour. Overhead is applied at the rate of $14 per direct labor hour. What is the total standard cost for one unit of product that would appear on a standard cost card?
(a)- $37.40.
(b)- $26.60.
(c)-$12.80.
(d)-$12.60.
(e)-$18.20

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Answer:

The correct answer is E.

Explanation:

Giving the following information:

Ship Co. produces storage crates that require 27.0 meters of material at $0.20 per meter and 0.40 direct labor hours at $18.00 per hour. Overhead is applied at the rate of $14 per direct labor hour.

Direct material= 27*0.20= $5.4

Direct labor= 18*0.40= $7.2

Overhead= 0.40*14= $5.6

Total unitary cost= $18.2

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