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Brief Exercise 24-01 Wildhorse Company uses both standards and budgets. For the year, estimated production of Product X is 565,000 units. Total estimated cost for materials and labor are $1,243,000 and $1,638,500. Compute the estimates for (a) a standard cost and (b) a budgeted cost.

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Answer and Explanation:

The computation is shown below:

a. The standard cost is

Fo material

= $1,243,000 ÷ 565,000 units

= $2.20 per unit

And, for labor it is

= $1,638,500 ÷ 565,000 units

= $2.90 per unit

b. The budgeted cost would be remian the same as the total cost i.e. $1,243,000 and $1,638,500

Hence, the same would be considered and relevant

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