Sung Park owns and operates Transpac Machining, a subcontractor to several aerospace-industry contractors. When Mr. Park wins a bid to produce a piece of equipment, he sets standard costs for the production of the item. He then compares actual manufacturing costs with the standards to judge the efficiency of production. 

In April 2010 Transpac won a bid to produce 15,000 units of a shielded component used in a navigation device. Specifications for the components were very tight, and Mr. Park expected that 20 percent of the components would fail his final inspection, even if every care was exercised in production. There was no way to identify defective items before production was complete. Therefore, 18,750 units had to be produced to get 15,000 good components. Standards were set to include an allowance for the expected number of defective items. 

Each final component contained 2.8 kilograms of direct materials, and normal scrap from production was expected to average an additional 0.4 kilograms per unit. The direct material was expected to cost $11.25 per kilogram plus $0.75 per kilogram for shipping and handling. 

Machining of the components required close attention by skilled machinists. Each component required 4 hours of machining time. The machinists were paid $22 per hour and worked 40-hour weeks. Of the 40 hours, an average of 32 hours was spent directly on production. The other 8 hours consisted of time for breaks and waiting time when machines were broken down or there was no work to be done. Nevertheless, all payments to machinists were considered direct labour, whether or not they were for time spent directly on production. In addition to the basic wage rate, Transpac paid employee benefits averaging $5 per hour and payroll taxes of 10 percent of the basic wages. 

Determine the standard cost of direct materials and direct labour for each good unit of output.