Question

J.C Coats Inc. carefully develops standards for its coat making operation. Its specifications call for 2 square yards of wool per coat. The budgeted price of wool is $50 per square yard. The actual price for the wool was $38 and the usage was only 1.6 yards of wool per coat. What would be the standard cost per output for the​ wool?

Answer 1

$100 per coat

Step-by-step explanation:

Standard ;

Wool required = 2 yard square per coat

Budgeted price = $50 per square yard

Therefore,

We will need to multiply the total direct material quantity per unit for its unitary cost in order to arrive at the standard cost per unit.

Total standard cost per coat = Wool per coat × Cost per square yard,

= 2 × $50

= $100 per coat