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 3.80 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.50 pounds. Materials cost $2 per pound, but Kimm always takes the 4.36% cash discount all of its suppliers offer. Freight costs average $0.44 per pound.

Direct labor. Each unit requires 2.50 hours of labor. Setup, cleanup, and downtime average 0.18 hours per unit. The average hourly pay rate of Kimm

Explanation / Answer

Total Direct material required to produce 1 unit=3.80+0.50=4.3 pounds

Material COst = $2 - discount @ 4.36%=$1.9128 per pound

Freight Cost=$0.44 per pound

Material COst per unit of product=(1.9128+0.44)*4.3=$10.11704

Total hours required = 2.68 hours per unit of product

Total labor cost=14.3*2.68=$38.324

Overhead per unit = 2.68*5.70=$15.276

Standard Cost=10.11704+38.324+15.276=$63.71704

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