Sergey Company has gathered the information shown below about its product. Direct materials: Each unit of product
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 $4 per pound, but Sergey 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 Sergey’s 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 Sergey’s total standard cost per unit.
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Related Book For
Accounting Principles
ISBN: 978-0470534793
10th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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