Seasonal Confections, Inc., a manufacturer of candies for various seasons of the year, wants to set up a standard costing system. The controller decided to set up a standard cost card for one product line. He chose the chocolate bunny line, which operates from February through April of each year. The chocolate bunnies are 8" tall dark chocolate molded rabbits. They are very popular each Easter season. Last year, Seasonal Confections produced 40,000 dark chocolate bunnies with the following total costs:
Direct materials (340,000 oz. @ $0.30) $102,000 Direct labor (10,000 DLH @ $9) 90,000
Required
1. Compute the direct materials allowed per bunny in ounces.
2. Compute the direct labor hours allowed per bunny in hours.
3. Set up a standard cost card for the prime cost of one chocolate bunny.