The price of direct materials or the standard cost as follows-
- For Direct Material standard cost will be $ 507,000.00
- For Direct labor standard cost will be $ 672,000.00
- For Variable Overhead standard cost will be $ 105,000.00
The standard cost and variances is calculated in the table form which is attached with this answer.
What is Standard Cost?
Rather than assigning the real costs of direct materials, direct labor, and manufacturing overhead to a product, a few manufacturers assign the expected or standard costs. which means a manufacturer's inventories and price of goods sold will begin with amounts that reflect the standard costs, not the actual costs, of a product. on account that a manufacturer must pay its suppliers and employees the actual costs, there are almost always differences between the actual costs and the standard costs, and the differences are stated as variances.
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