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

Explanation / Answer

Calculation of total standard cost per unit

Particulars Workings Amount per Unit (in $) Direct material (4.2+0.70 )pounds * ($0.98+$0.45) 7.01 Direct labor (1.60+0.20) hours*$(12.30+2.40) 26.46 Manufacturing Overhead 1.60 hours*$6.60 10.56 Total 44.03

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.