Hickory Furniture Company manufactures unfinished oak furniture.Hickory uses a A detailed estimate of what a product shouldcost.standard cost system. The direct labor, direct materials, andfactory overhead Performance goals, often relating to how much aproduct should cost.standards for an unfinished dining room tableare as follows:
Direct labor: standard rate $21 per hr. standard time per unit 3 hrs. Direct materials (oak): standard price $10 per bd. ft. standard quantity 20 bd. ft. Variable factory overhead: standard rate $2.4 per direct labor hr. Fixed factory overhead: standard rate $0.8 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 Accounting systems that use standards foreach element of manufacturing cost entering into the finishedproduct.standard cost system provides Hickory Furniture managementa cost control tool using the principle of management byexception
cost control
management by exception
. Using this principle, major < >majorminor costdeviations from standards can be investigated and corrected.
Hickory Furniture Company manufactures unfinished oak furniture.Hickory uses a A detailed estimate of what a product shouldcost.standard cost system. The direct labor, direct materials, andfactory overhead Performance goals, often relating to how much aproduct should cost.standards for an unfinished dining room tableare as follows:
| Direct labor: | standard rate | $21 per hr. |
| standard time per unit | 3 hrs. | |
| Direct materials (oak): | standard price | $10 per bd. ft. |
| standard quantity | 20 bd. ft. | |
| Variable factory overhead: | standard rate | $2.4 per direct labor hr. |
| Fixed factory overhead: | standard rate | $0.8 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 Accounting systems that use standards foreach element of manufacturing cost entering into the finishedproduct.standard cost system provides Hickory Furniture managementa cost control tool using the principle of management byexception
cost control
management by exception
. Using this principle, major < >majorminor costdeviations from standards can be investigated and corrected.
