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Problem - Shannon Company is planning to produce 1,500 units of product in 2014. Each unit requires 1.30 pounds of materials at $4.40 per pound and a half-hour of labor at $14.40 per hour. The overhead rate is 90% of direct labor.
(a) Compute the budgeted amounts for 2014 for direct materials to be used, direct labor, and applied overhead.
(b) Compute the standard cost of one unit of product.
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