Karnes Company has gathered the following information about its product. 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 $4 per pound, but Karnes 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 0.2 hours per unit. The average hourly pay rate of Karnes’ employees is $12. Payroll taxes and fringe benefits are an additional $3 per hour.

Manufacturing overhead: Overhead is applied at a rate of $6 per direct labor hour.

Instructions

Compute Karnes’ total standard cost per unit.