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Custom Design manufactures t-shirts for new parents and grandparents by turning a client's newborn ...

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Custom Design manufactures t-shirts for new parents and grandparents by turning a client's newborn ...

Custom Design manufactures t-shirts for new parents and grandparents by turning a client's newborn baby's picture into a design on the shirt. The following information has been provided by various units within Custom Design's departments. The company purchases cotton t-shirts in bundles of 100 at a price of $400 per bundle. Custom Design has to pay shipping charges of $10 per bundle. The process of transferring pictures onto the shirts costs $0.75 per shirt. Each shirt is boxed in a cardboard box that costs $0.15 each. It takes one worker 10 minutes to prepare a shirt and transfer the picture onto the shirt and another worker 5 minutes to check the shirt for flaws in the printing and package the shirt. Workers are paid $15 per hour. Custom Design applies overhead at a rate of 100% of direct labor cost.

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Compute the standard cost of producing one t-shirt.

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Managerial Accounting

Edition: 4^th

Author: Davis

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