Problem:
XYZ Company produces high quality widgets. Three raw materials are converted into the finished product by two labor groups. Manufacturing overhead is applied to finished units based on direct labor hours. The following standards have been established for each widget produced:
Raw material #1 50 lbs. @$6.50/lb
Raw material #2 24 ft. @ $4.75/ft
Raw material #3 1 container @ $16.00
Labor group #1 3 hrs @ $20.00/hr
Labor group #2 1.5 hrs @ $30.00/hr
Manufacturing overhead $20.00/dhr
a) Calculate the standard cost of producing 400 high quality widgets.