Alpha manufacturing company produces a single product, which is known as sigma. The product requires a single operation, and the standard cost for this operation is presented in the following standard cost card:
|
Standard cost card for product sigma |
(£) |
|
Direct materials: |
|
|
2kg of A at £10 per kg |
20.00 |
|
1 kg of B at £15 per kg |
15.00 |
|
Direct labour (3 hours at £9 per hour) |
27.00 |
|
Variable overhead (3 hours at £2 per direct labour hour) |
6.00 |
|
Total standard variable cost |
68.00 |
|
Standard contribution margin |
20.00 |
|
Standard selling price |
88.00 |