Atlas Furniture Company manufactures designer home furniture. Atlas uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:Direct labor:standard rate$22.00 per hr. standard time per unit3 hrs.Direct materials (oak):standard price$11.50 per bd. ft. standard quantity16 bd. ft.Variable factory overhead:standard rate$3.20 per direct labor hr.Fixed factory overhead:standard rate$1.20 per direct labor hr.a. Determine the standard cost per dining room table. If required, round your answer to two decimal places.$per tableb. A standard cost system provides Atlas Furniture Company’s management a cost control tool using the principle of . Using this principle, cost deviations from standards can be investigated and corrected.

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Answered: Atlas Furniture Company manufactures…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 17E: Davis Co. uses backflush costing to account for its manufacturing costs. The trigger points are the...

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Atlas Furniture Company manufactures designer home furniture. Atlas uses a standard cost system. The direct labor, direct materials, and factory overhead standards for an unfinished dining room table are as follows:

Direct labor:	standard rate	$22.00 per hr.
	standard time per unit	3 hrs.
Direct materials (oak):	standard price	$11.50 per bd. ft.
	standard quantity	16 bd. ft.
Variable factory overhead:	standard rate	$3.20 per direct labor hr.
Fixed factory overhead:	standard rate	$1.20 per direct labor hr.

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

b. A standard cost system provides Atlas Furniture Company’s management a cost control tool using the principle of . Using this principle, cost deviations from standards can be investigated and corrected.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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