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Custom Design manufactures baby blankets by turning a client's photograph of a new baby into a ...

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Custom Design manufactures baby blankets by turning a client's photograph of a new baby into a ...

Custom Design manufactures baby blankets by turning a client's photograph of a new baby into a design printed on the blanket. This is a popular item, selling for $30, for new parents and grandparents. The following information has been provided by various units within Custom Design's departments. The company purchases fleece blankets in bundles of 100 at a price of $500 per bundle. Custom Design has to pay shipping charges of $10 per bundle. The process of transferring a picture onto a blanket costs $1.50. Each blanket is boxed in a cardboard box that costs $0.25 each. It takes one worker 15 minutes to prepare a blanket and transfer the picture onto the blanket and another worker 5 minutes to check the blanket for flaws in the printing and package the blanket. Workers are paid $15 per hour. Custom Design applies overhead at a rate of 120% of direct labor cost.

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Compute the standard cost of producing one blanket.

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Managerial Accounting

Edition: 4^th

Author: Davis

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