Exercise 11-3

Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.00 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.50 pounds. Materials cost $4 per pound, but Stefani always takes the 2.00% cash discount all of its suppliers offer. Freight costs average $0.25 per pound. Direct labor. Each unit requires 1.90 hours of labor. Setup, cleanup, and downtime average 0.10 hours per unit. The average hourly pay rate of Stefanis employees is $13.70. Payroll taxes and fringe benefits are an additional $2.30 per hour. Manufacturing overhead. Overhead is applied at a rate of $6.00 per direct labor hour. Compute Stefanis total standard cost per unit.