Question
Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.90 pounds of materials. The average waste and
Stefani Company has gathered the following information about its product. Direct materials: Each unit of product contains 3.90 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 1.10 pounds. Materials cost $4 per pound, but Stefani always takes the 2.00% cash discount all of its suppliers offer. Freight costs average $0.40 per pound.
Direct labor. Each unit requires 1.60 hours of labor. Setup, cleanup, and downtime average 0.10 hours per unit. The average hourly pay rate of Stefanis employees is $10.90. Payroll taxes and fringe benefits are an additional $3.20 per hour.
Manufacturing overhead. Overhead is applied at a rate of $7.60 per direct labor hour.
Compute Stefanis total standard cost per unit.
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