Special Snacks makes individually wrapped crme-filled cupcakes. Materials for each cupcake include 250 grams cake batter costing $0.24, 100 ml. filling costing $0.03, 200 ml. frosting costing $0.03, and packaging costing $0.04. The company allows $0.02 per cupcake for waste during the production process. The standard wage rate is $10.45 per hour, and each cupcake requires an average of 0.08 labour hours to produce.

Total overhead is $675,000, allocated based on direct labour cost, which is expected to be $950,000 for the year. As company accountant, your task is to determine the current standard cost for one cupcake. What is your finding?

• A :

  $1.75

• B :

  $1.20

• C :

  $2.37

• D :

  $1.79