Stefani SpA has gathered the following information about its product.

Direct materials. Each unit of product contains 4.5 kilograms of materials. The average waste and spoilage per unit produced under normal conditions is 0.5 kilograms. Materials cost €5 per kilogram, but Stefani always takes the 2% cash discount all of its suppliers off er. Freight costs average €0.25 per kilogram.

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.