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 4.20 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.70 pounds. Materials cost $ 1 per pound, but Stefani always takes the 2.00 % cash discount all of its suppliers offer. Freight costs average $ 0.45 per pound.

Direct labor. Each unit requires 1.60 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani’s employees is $ 12.30 . Payroll taxes and fringe benefits are an additional $ 2.40 per hour.

Manufacturing overhead. Overhead is applied at a rate of $ 6.60 per direct labor hour.

Compute Stefani’s total standard cost per unit. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.)

Total standard cost per unit

Explanation / Answer

Compute standard cost per unit"

Direct material (4.9*1.43) 7.01 Direct labour (1.8*14.7) 26.46 Manufacturing overhead (6.6*1.8) 11.88 Total Standard cost per unit 45.35

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