Muhsin Company has gathered the following information about its product:
Direct materials: Each unit of product contains 4.5 kg of materials. The average waste and spoilage per unit produced under normal conditions is 0.5 kg. Materials cost $5 per kilogram, but Muhsin always takes the 2% cash discount that all of its suppliers offer. Freight costs average $0.25 per kilogram.
Direct labour: Each unit requires two hours of labour. Set-up, cleanup, and downtime average 0.3 hours per unit. The average hourly pay rate of Muhsin'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 labour hour.
Instructions
Calculate Muhsin's total standard cost per unit.