Standard Cost Card

It is a card record of the Standard or expected costs in producing a specified output.  This gives the physical quantities of inputs and also their monetary values. This gives also the quality required. As an example:  Grade a labour.

The setting process of standards results in the establishment of the standard cost for the product. The make-up of the standard cost is recorded on a standard cost card. As an example: a standard cost card in a company's X004 product would look given as:

Assuming the given product details as:

1. The product passes via department A, B, and C

2. It consume the following two types of direct materials as:

            P10:  2.5 kg (kilo-gram) each @ Shs.14.8:  it is applied in department A

            A53:  1000 units @ shs.3.75 per 100 units:  It is applied in department B.

3. X004 also used direct labour given as:

Grade M:  4.8 hours @ Shs.2.5/hr in Department A

Grade N:  9.2 hours @ Shs.2.5/hr in Department B.

Grade O:  (Assembly time):  16.4 hours @ Shs.1.75/hr in Department C.

4. Production overheads are applied given as:

Machine overheads:  based on direct labour hours. They are incurred like shs.11/hr in departments A and B.

Indirect labour:  based on direct labour hours in Department C above at shs.6/hr.

Required

Prepare or get ready a standard cost card for product X004.

Solution: