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Product A uses 4 kg of material X and 7 kg of material Y at a standard price of $5 per kg and $6 per kg respectively. Product A needs two hours of skilled labour and one hour of semi-skilled labour at $10 per hour and $8 per hour respectively.
Production overhead is absorbed at $5 per labour hour. Selling and distribution costs are $3 per unit of product A.
What is the standard cost of production for product A?Daniel: Don’t just ask for the answers to questions. Say what your problem is!
The answer is in fact $105.
Thank you sir, pls i had 110 and i dnt get the overheads how it was absorbed. I added their hours allowed for the skilled and semi skilled and multiplied it by the $5.
but didn’t get your answer.pls wer did i go wrong?Material X: 4 x $5 = 20
Material Y: 7 x $6 = 42
Skilled labour: 2 x $10 = 20
Unskilled labour: 1 x $8 = 8
Production overheads: 3 x $5 = 15Total: $105
🙂
Sir pls, i have seen where i went wrong, i used material x and y as if they were separate product.
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