Lopez Company uses both standards and budgets. For the year, estimated production of Product X is 500,000 units. Total estimated cost for materials and labor are $1,400,000 and $1,700,000. Compute the estimates for (a) a standard cost and (b) a budgeted cost. (Round standard costs to 2 decimal places, e. g. 1.25.)

a. Standard cost = Total estimated cost of material ÷ Estimated production

= $1,400,000 / 500,000 unit

= $2.80 per unit

Thus, the standard cost of material is $2.80, and the budgeted cost is $1,400,000.

b. Standard cost = Total estimated cost of labor / Estimated production

= $1,700,000 / 500,000

= $3.40  per unit

Thus, standard cost of labor is $3.40 and budgeted cost is $1,700,000.

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