I am currently in a Accounting class. I am having difficulties understanding the following how to Compute the cost of leather and direct labor that should have been incurred for the production of 10,000 purses.
The information that I have is this to figure the problem:
Leather (6 strips @<hidden> $8) $48
Direct labor (1.5 hrs. @<hidden> $12 $18
Total prime cost @<hidden>



During the year, Cordero produced 10,000 leather purses. Actual leather purchased was 61,000 strips at $7.96 per strip. There were no beginning or ending inventories of leather. Actual direct labor was 15,600 hours at $12.50 per hour.

Here is what I do not under stand. How to figure out the standard for the material and the labor? What figure I should use to obtain the answer?
How to figure what the budget cost formula is and what numbers I should be using?
If someone can explain this process and how and were I should get the figured to get the correct answer will help me greatly.
I do not know how to fine the budget cost for material and labor. If u can use another example I can figure out what to do thanks

I do not need answer just explain to me how to get the answer.
Thank you