Question

Exercise 15-3 Pronghorn 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 0.20 pounds. Materials cost $2 per pound, but Pronghorn always takes the 1.00% cash discount all of its suppliers offer. Freight costs average $0.45 per pound. Direct labor. Each unit requires 2.60 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Pronghorn's employees is $13.40. Payroll taxes and fringe benefits are an additional $3.10 per hour. Manufacturing overhead. Overhead is applied at a rate of $6.10 per direct labor hour. Compute Pronghorn's total standard cost per unit. (Round answer to 2 decimal places, e.g. 1.25.) Total standard cost per units

Answer 1

Answer
Computation of standard cost per unit
Particulars	Amount
Direct material [(3.9+0.2)*($2*99%+0.45)]	9.96
Direct labor (2.8 * $16.5)	46.2
Manufacturing overhead (2.8*$6.1)	17.08
Standard cost per unit	73.24
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