Question

Send to Gradebook < Prev Nons --/1 Question 7 View Policies Current Attempt in Progress Stefani Company has gathered the following information about its product. Direct materials. Each unit of product contains 5.00 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 1.00 pounds. Materials cost $1 per pound, but Stefani always takes the 5.00% cash discount all of its suppliers offer. Freight costs average 50.25 per pound. Direct labor. Each unit requires 1.70 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani's employees is $10.60. Payroll taxes and fringe benefits are an additional $3.00 per hour. Manufacturing overhead. Overhead is applied at a rate of $7.90 per direct labor hour Compute Stefani's total standard cost per unit. (Round answer to 2 decimal places, e.. 1.25.) Total standard cost per unit 5 e Textbook and Media Attempts: 0 of 3 used Save for Later Submit Answer Send to Gradebook

Answer 1

Solution:

Materials cost:

Standard quantity of materials per unit = 5 + 1 = 6 pounds

Standard Price of materials per pound = ($1*95%) + $0.25 = $1.20 per pound

Standard cost of Materials per unit = 6 pounds * $1.20 = $7.20 per unit

Labor cost:

Standard hour per unit = 1.70 + 0.20 = 1.90 hours

Standard Rate of labor per hour = $10.60 + $3.40 = $14 per hour

Standard cost of labor per unit = 1.90 hours * $14 = $26.60 per unit

Manufacturing overhead:

Standard Manufacturing overhead cost per unit = 1.90 hours * $7.90 = $15.01 per unit

Now,

Total Standard cost per unit = Standard cost of Materials per unit + Standard cost of labor per unit + Standard Manufacturing overhead cost per unit

= $7.20 + $26.60 + $15.01 = $48.81