Question

Exercise 23-3 Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.20 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.10 pounds. Materials cost $2 per pound, but Stefani always takes the 5.00% cash discount all of its suppliers offer. Freight costs average $0.25 per pound Direct labor. Each unit requires 2.10 hours of labor. Setup, cleanup, and downtime average 0.10 hours per unit. The average hourly pay rate of Stefani's employees is $13.20. Payroll taxes and fringe benefits are an additional $2.20 per hour. Manufacturing overhead. Overhead is applied at a rate of $4.80 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 s

Answer 1

Solution:

Computation of Standard cost per unit - Stefani Company
Particulars	Unit Cost
Direct material [(3.20+0.10) *($2*95% + $0.25)]	$7.10
Direct labor (2.2*$15.40)	$33.88
Manufacturing overhead (2.20*$4.80)	$10.56
Standard cost per unit	$51.54