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1.17points eBook Print References Check my workCheck My Work button is now enabled Item 7 Exercise 14-18 (Algo) Standard absorption cost per unit LO 14-9,
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Item 7
Exercise 14-18 (Algo) Standard absorption cost per unit LO 14-9, 14-10
A cost analyst for Stamper Manufacturing Company has assembled the following data about the Model 24 stamp pad:
- The piece of sheet metal from which 8 pad cases can be made costs $0.15.
- This amount is based on the number of sheets in a 3,500-pound bundle of sheet metal, which is the usual purchase quantity.
- The foam pad that is put in the case costs $0.04, based on the number of pads that can be cut from a large roll of foam.
- Production standards, based on engineering analysis recognizing attainable performance, provide for the manufacture of 1,510 pads by 3 workers in an eight-hour shift. The standard direct labor pay rate is $11.65 per hour.
- Manufacturing overhead is applied to units produced using a predetermined overhead application rate of $17.0 per direct labor hour, of which $8.5 per hour is fixed manufacturing overhead.
Required:
Calculate the standard absorption cost of a package of 19 stamp pads.
- Stamper Manufacturing Company's management is considering a special promotion that would result in increased sales of 2,900 packages of 19 pads per package. Calculate the cost per package that is relevant for this analysis.
Note: For all requirements, do not round intermediate calculations. Round final answer to 2 decimal places.
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