# Muhsin Company has gathered the information shown on the next page about its product. Direct materials: Each unit of product

## Question:

Muhsin Company has gathered the information shown on the next page 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 Muhsin 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 Muhsin’s employees is \$12. Payroll taxes and fringe benfits are an additional \$3 per hour.
Manufacturing overhead: Overhead is applied at a rate of \$6 per direct labor hour.

Instructions
Compute Muhsin’s total standard cost per unit.

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Related Book For

## Accounting Principles

ISBN: 978-0470533475

9th Edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Question Details
Chapter # 25- Standard Costs and Balanced Scorecard
Section: Exercises
Problem: 3
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Question Posted: October 21, 2011 05:20:43