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$21.00 per hr. standard time per unit2 hrs.Direct materials (oak):standard price$10.50 per bd. ft. standard quantity18 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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Asked Nov 18, 2019
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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 $21.00 per hr.
  standard time per unit 2 hrs.
Direct materials (oak): standard price $10.50 per bd. ft.
  standard quantity 18 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.

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Expert Answer

Step 1

Standard Cost:

 

A standard cost is an estimated or a pre-determined cost of performing an operation or manufacturing a product or rendering a service. It is assumed to be a form of traget cost.

Step 2

Requirement a:

 

Compute the standard cost per dining room table of...

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Particulars Direct Labor (2 Hrs x $ 21per hour) Direct Material (18 bd. Ft. x $10.50 per bd ft) Variable Factory Overhead (2 Hrs x $3.2 per Fixed Factory Overhead (2 Hrs. x $1.20 per Hr.) Total unit (S) Cost per 42 189 6.4 2.4 239.8

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