Exercise 23-3 Stefani Company has gathered the following information about its p
ID: 2570892 • Letter: E
Question
Exercise 23-3 Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.10 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 1.00% cash discount all of its suppliers offer. Freight costs average $0.25 per pound. Direct labor. Each unit requires 2.10 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani's employees is $12.60. Payroll taxes and fringe benefits are an additional $2.30 per hour Manufacturing overhead. Overhead is applied at rate of $4.90 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 $ Click if you would like to Show Work for this question: Open Show WorkExplanation / Answer
3.10 + 0.70 = 3.80 pounds of materials needed for each unit
3.80 x $4 = $15.2 normal materials cost per unit
15.2 x 0.99 = $15.05 with discount
3.80 x 0.25 = $.95 freight cost per unit
2.10 + 0.20 = 2.30 direct labor hours per unit
2.30 x (12.60 + 2.30) = $34.27 labor per unit
2.30 x 4.90 = $11.27 overhead per unit
15.05+.95 + 34.27 + 11.27 = $61.54 standard cost per unit
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