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 3.90 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.70 pounds. Materials cost $4 per pound, but Stefani always takes the 2.00% cash discount all of its suppliers offer. Freight costs average $0.40 per pound.

Direct labor. Each unit requires 1.60 hours of labor. Setup, cleanup, and downtime average 0.10 hours per unit. The average hourly pay rate of Stefani’s employees is $10.90. Payroll taxes and fringe benefits are an additional $3.20 per hour.

Manufacturing overhead. Overhead is applied at a rate of $7.60 per direct labor hour.

Compute Stefani’s total standard cost per unit. (Round answer to 2 decimal places, e.g. 1.25.)

Explanation / Answer

Direct materials 19.87 =(3.9+0.7)*4*0.98+(3.9+0.7)*0.4 Direct labor 23.97 =(1.6+0.1)*10.9+(1.6+0.1)*3.2 Manufacturing overhead 12.92 =(1.6+0.1)*7.6 Total standard cost per unit 56.76

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