Chapter_26_Standard_costs - STANDARD COSTS Xavier Company...

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STANDARD COSTS Xavier Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor hours. The standard costs for one unit of product are as follows: Direct material: 6 ounces at $0.50 per ounce …………………………………………………………… $ 3 Direct labor: 1.8 hours at $10 per hour ………………………………………………………………….. 18 Variable manufacturing overhead: 1.8 hours at $5 per hour ……………………………………………. 9 Total standard variable cost per unit ……………………………………………………………………. $30 During June, 2,000 units were produced. The actual costs associated with June’s operations were as follows: Material purchased: 18,000 ounces at $0.60 per ounce …………………………………………… $10,800 Material used in production: 14,000 ounces ……………………………………………………… Direct labor: 4,000 hours at $9.75 per hour ………………………………………………………
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