Exercise 23-3 Stefani Company has gathered the following information about its p

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 $5 per pound, but Stefani always takes the 5.00% cash discount all of its suppliers offer. Freight costs average $0.45 per pound. Direct labor. Each unit requires 2.40 hours of labor. Setup, cleanup, and downtime average 0.10 hours per unit. The average hourly pay rate of Stefani's employees is $14.00. Payroll taxes and fringe benefits are an additional $3.70 per hour Manufacturing overhead. Overhead is applied at a rate of $7.00 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

Materials = (3.10+.70)*5 *95% +(3.10+.7)*.45 19.76 labor           = (2.40+.10)*14 +(2.40+.10)*3.70 44.25 manufacturing overhead = (2.5)*7 17.5 Standard cost per unit Materials 19.76 labor 44.25 manufacturing overhead 17.5 Standard cost per unit 81.51 answer

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