In order to properly track costs, Sweet Wave Bakery uses very stringent standard costs in evaluating efficiency. Management is working hard to make these costs precise, but they have not yet achieved this goal. Currently, they use the following standards:

Materials Item Per Unit Cost Flour 1 lb. $.63 per pound Sugar 12 oz. $1.00 per pound Butter 4 OZ. $.88 per pound Direct Labor Item Per Unit Cost Labor 15 min. $8.00 per hour Predetermined overhead rate based on direct labor hours $4.28