Question

Stefani Company has gathered the following information about its product.

Direct materials: Each unit of product contains 3.40 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.60 pounds. Materials cost $ 5 per pound, but Stefani always takes the 4.00 % cash discount all of its suppliers offer. Freight costs average $ 0.40 per pound.

Direct labor. Each unit requires 1.00 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani’s employees is $ 10.00 . Payroll taxes and fringe benefits are an additional $ 3.90 per hour.

Manufacturing overhead. Overhead is applied at a rate of $ 4.50 per direct labor hour.

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

Total standard cost per unit $ Entry field with incorrect answer now contains modified data

Answer 1

Total standard cost per unit is $41.98

Step-by-step explanation:

Computation of Stefani’s total standard cost per unit.

Direct materials ((3.40 pounds+0.60 pounds)×($ 5×96%)) = 19.20

Freight Cost ($ 0.40×(3.40 pounds+0.60 pounds)) = 1.60

Direct labor (1.00×($ 10.00+$ 3.90)) = 13.90

Setup, cleanup, and downtime (0.20×($ 10.00+$ 3.90)) = 2.78

Manufacturing overhead ($ 4.50×1.00) = 4.50

Total standard cost per unit = 41.98