Question

Exercise 11-3 (Video) Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.10 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.90 pounds. Materials cost $4 per pound, but Stefani always takes the 1.00% 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 0.20 hours per unit. The average hourly pay rate of Stefani’s employees is $12.60. Payroll taxes and fringe benefits are an additional $2.30 per hour. Manufacturing overhead. Overhead is applied at a rate of $4.90 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 $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

Computation of Stefani's total standard cost per unit Material = (3.10 + 0.90) x $4 x 0.99 + $0.25 x (3.10 + 0.90) = 15.84 + 1.00 = $16.84 Labor = (2.10 + 0.20 x $12.6 + $2.30 x (2.10 + 0.20) = 28.98 +5.29 = $34.27 Overhead = (2.10 +0.20 x $4.90 = $28.98 Total standard cost per unit = $16.84 + $34.27 + $28.98 = $80.09