Kimm Company has gathered the following information about its product. Direct ma

Question

Kimm Company has gathered the following information about its product. Direct materials. Each unit of product contains 4.60 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.80 pounds. Materials cost S4 per pound, but Kimm always takes the 3.43% cas discount all of its suppliers offer. Freight costs average SO.31 per pound. Direct labor. Each unit requires 2.70 hours of labor. Setup, cleanup, and downtime average 0.26 hours per unit. The average hourly pay rate of Kimm's employees is $13.80. Payroll taxes and fringe benefits are an additional $3.60 per hour. Manufacturing overhead. Overhead is applied at a rate of $5.70 per direct labor hour. Compute Kimm's total standard cost per unit.

Explanation / Answer

Standard Cost Card data:

Total Standard Cost per unit = $90.90

Elements(1) Input per unit(2) Cost per Input(3) Cost per Unit (2x3=4) Direct Materials (4.6pounds + 0.80 pounds)=5.40 pounds $(4 x 96.57%) +$0.31 =$8.0356 $22.53 Direct Labor (2.70Hr +0.26Hr) = 2.96Hrs ($13.80 + $3.60) = $ 17.40 $51.50 Manufacturing Overhead 2.96Hrs $5.70 $16.87 Total Standard cost $90.90

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