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Direct Labor Cost & Standard Absorption Cost

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1. Brass Creations Co. makes decorative candle pedestals. An industrial engineer consultant developed ideal time standards for one unit of the Cambridge model pedestal. The standards follow, along with the cost accountantâ??s determination of current labor pay rates:

Worktype 1 0.20 hour @ $18.40 per hour
Worktype 2 0.30 hour @ $16.50 per hour
Worktype 3 0.42 hour @ $28.00 per hour

Required:
(a) Using the preceding data, calculate the direct labor cost for a Cambridge model pedestal. (Do not round your intermediate calculations. Round final answer to two decimal places)

Direct labor cost $:_________

2. DMA, Inc., processes corn into corn starch and corn syrup. The company's productivity and cost standards follow:

From every bushel of corn processed, 12 pounds of starch and 6 pounds of syrup should be produced.
Standard direct labor and variable overhead total $0.86 per bushel of corn processed.
Standard fixed overhead (the predetermined fixed overhead application rate) is $0.66 per bushel processed.

Required:
Calculate the standard absorption cost per pound for the starch and syrup produced from the processing of 15,000 bushels of corn if the average cost per bushel is $5.68. (Do not round your intermediate calculations. Round final answer to 2 decimal places. Omit the "$" sign in your response.)

Standard absorption cost $ :_________ per pound

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Solution Summary

The solution computes direct labor cost and standard absorption cost with the given data.

Solution Preview

1. We need to calculate labor cost for each worktype and add them up.

Direct Labor ...

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