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 4.90 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.60 pounds. Materials cost $4 per pound, but Stefani always takes the 2.00% cash discount all of its suppliers offer. Freight costs average $0.35 per pound. Direct labor. Each unit requires 1.80 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani’s employees is $12.70. Payroll taxes and fringe benefits are an additional $2.00 per hour. Manufacturing overhead. Overhead is applied at a rate of $6.80 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

Workings

Material Cost Per Unit 5.5*4.27 21.56 Labor Cost Per Unit 14.7*2 29.4 Overhead rate Per Unit 13.6 Total standard cost per unit 64.56

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