Response to the following :
Standard product cost
In addition to the information presented in Mini Exercises 1 and 2, ABC Company currently pays a standard rate of $1 per pound for raw materials. Each unit should be produced in 15 minutes of direct labor time at a standard direct labor rate of $12 per hour. Manufacturing overhead is applied at the standard rate of $16 per direct labor hour.
Required: Calculate the standard cost per unit for ABC Company.
Exercises 2
Purchases budget
In addition to the information presented in Mini Exercise 1, each unit that ABC Company produces uses 3 pounds of raw material. ABC requires 25% of the next month's budgeted production as raw material inventory each month.
Required: Calculate the number of pounds of raw material to be purchased in June.
Exercise 1
Production budget
ABC Company's budgeted sales for June, July, and August are 12,000, 16,000, and 14,000 units, respectively. ABC requires 30% of the next month's budgeted unit sales as finished goods inventory each.