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 3.70 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.60 pounds. Materials cost $1 per pound, but Stefani always takes the 3.00% cash discount all of its suppliers offer. Freight costs average $0.40 per pound. Direct labor. Each unit requires 1.00 hours of labor. Setup, cleanup, and downtime average 0.10 hours per unit. The average hourly pay rate of Stefani’s employees is $10.60. Payroll taxes and fringe benefits are an additional $2.90 per hour. Manufacturing overhead. Overhead is applied at a rate of $4.00 per direct labor hour. Compute Stefani’s total standard cost per unit. (Round answer to 2 decimal places, e.g. 1.25.) Total standard cost per unit $

Explanation / Answer

Calculate standard cost per unit :

Direct material (4.3*1.37) 5.89 Direct labour (1.1*13.50) 14.85 Overhead applied (1.1*4) 4.40 Total standard cost per unit 25.14

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