Question

Mama Fran's Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area. The company's best-selling cookie is the double chocolate almond supreme. Mama Fran's recipe requires 10 ounces of a commercial cookie mix, 5 ounces of milk chocolate, and 1 ounce of almonds per pound of cookies. The standard direct materials costs are $0.80 per pound of cookie mix, $4 per pound of milk chocolate, and $12 per pound of almonds. Each pound of cookies requires 1 minute of direct labor in the mixing department and 2 minutes of direct labor in the baking department. The standard labor rates in those departments are $14.40 per direct labor hour (DLH) and $18 per DLH, respectively. Variable overhead is applied at a rate of $32.40 per DLH; fixed overhead is applied at a rate of $60 per DLH .

Calculate the standard cost for a pound of Mama Fran's double chocolate almond supreme cookies.​

Answer 1

Particulars	Amount($)
Direct Material
- Cookie mix {(0.80/16)*10}	0.50
- Milk chocolate {(4/16)*5}	1.25
- Almonds {(12/16)*1}	0.75
Direct Labour
- Mixing Department{(14.40/60)*1}	0.24
- Baking Department{(18/60)*2}	0.60
Variable Overhead {(32.40/60)*3}	1.62
Fixed Overhead {(60/60)*3}	3.00
Total Cost per pound	7.96

Note: 1pound = 16 ounces

           1hour = 60 minutes