Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains
Question:
Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 4.5 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.5 pounds. Materials cost $ 5 per pound, but Stefani always takes the 2% cash discount all of its suppliers offer. Freight costs an average of $ 0.25 per pound.
Direct labor. Each unit requires 2 hours of labor. Setup, cleanup, and downtime average of 0.4 hours per unit. The average hourly pay rate of Stefani's employees is $12. Payroll taxes and fringe benefits are an additional $ 3 per hour.
Manufacturing overhead. Overhead is applied at a rate of $7 per direct labor hour.
Compute Stefani's total standard cost per unit.