Hickory Furniture Company manufactures unfinished oak furniture. Hickory 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 |
$20.00 per hr. |
|
standard time per unit |
2.5 hrs. |
| Direct materials (oak): |
standard price |
$10.00 per bd. ft. |
|
standard quantity |
18 bd. ft. |
| Variable factory overhead: |
standard rate |
$3.20 per direct labor hr. |
| Fixed factory overhead: |
standard rate |
$1.60 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 Hickory Furniture management a cost control tool using the principle of . Using this principle, cost deviations from standards can be investigated and corrected.