Stefani Company has gathered the following information about its product. Direct

Question

Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.50 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.70 pounds. Materials cost $4 per pound, but Stefani always takes the 5.00% cash discount all of its suppliers offer. Freight costs average $0.25 per pound Direct labor. Each unit requires 2.00 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani's employees is $13.70, Payroll taxes and fringe benefits are an additional $2.20 per hour. Manufacturing overhead. Overhead is applied at a rate of $6.00 per direct labor hour Compute Stefani's total standard cost per unit. (Round answer to 2 decimal places, e.g. 1.25.) otal standard cost pr unit

Explanation / Answer

Standard Cost Per Unit = Direct Material Cost + Frieght Cost + Direct Labor Cost + Manufacturing OH

Standard Cost Per Unit = (3.50 + 0.70) * 4 * 0.95 + (3.50 + 0.70) * 0.25 + 2.20 * 15.90 + 2.2 * 6

Standard Cost Per Unit = $15.96 + $1.05 + $34.98 + $13.2

Standard Cost Per Unit = $65.19

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