Question

Standard Product Cost

Hickory Furniture Company manufactures unfinished oak furniture.Hickory uses a standard cost system. The direct labor, directmaterials, and factory overhead standards for an unfinished diningroom table are as follows:

Direct labor:	standard rate	$19 per hr.
	standard time per unit	2.5 hrs.
Direct materials (oak):	standard price	$9.5 per bd. ft.
	standard quantity	19 bd. ft.
Variable factory overhead:	standard rate	$2.8 per direct labor hr.
Fixed factory overhead:	standard rate	$1.2 per direct labor hr.

a. Determine the standard cost per dining roomtable. If required, round your answer to two decimal places.
$per table

b. A standard cost system provides HickoryFurniture management a cost control tool using the principle of .Using this principle, cost deviations from standards can beinvestigated and corrected.