Question

Question 2 --/18 View Policies Current Attempt in Progress 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 answer to 2 decimal places, e.g. 1.25.) Total standard cost per unit $

Answer 1

Direct material cost:
Total pound required=3.4+0.6=4 pounds
Material cost per pound after cash discount=5*(100%-4%)=5*96%=$ 4.8
				$
Material cost		(4*4.8)		19.2
Freight charges		(4*0.40)		1.6
Total				20.8
Direct labor cost:
Total hours required=1+0.20=1.20 hours
				$
Labor charges		(1.20*10)		12
Payroll taxes		(1.20*3.90)		4.68
Total				16.68
Manufacturing overhead=1.20*4.50=$ 5.40
Standard cost per unit:
			$
Direct material			20.8
Direct labor			16.68
Manufacturing overhead			5.4
Total			42.88