Stefani Company has gathered the following information about its product. Direct materials. Each unit of product contains
Question:
Direct materials. Each unit of product contains 4.5 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.5 pounds.
Materials cost $5 per pound, but Stefani always takes the 2% cash discount all of its suppliers offer. Freight costs average $0.25 per pound.
Direct labor. Each unit requires 2 hours of labor. Setup, cleanup, and downtime average 0.4 hours per unit. The average hourly pay rate of Stefani’s employees is $12.
Payroll taxes and fringe benefits are an additional $3 per hour.
Manufacturing overhead. Overhead is applied at a rate of $7 per direct labor hour.
Instructions
Compute Stefani’s total standard cost per unit.
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Related Book For
Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso
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