Question

Exercise D5-6 Vaughn'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. Vaughn'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, $8 per pound of milk chocolate, and $14 per pound of almonds. Each pound of cookies requires 1 minute of direct labor in the mixing department and 5 minutes of direct labor in the baking department. The standard labor rates in those departments are $12.90 per direct labor hour (DLH) and $19 per DLH, respectively. Variable overhead is applied at a rate of $32.80 per DLH; fixed overhead is applied at a rate of $60 per DLH. Calculate the standard cost for a pound of Vaughn's double chocolate almond supreme cookies. (Round answer to 2 decimal places, e.g. 3.51.) Standard cost per pound $

Answer 1

• Correct Answer
  Standard Cost per pound = $ 14.95
• Working

>Note: 1 pound = 16 ounces

	Qty		x	Rate	=	Amount of Cost per pound
Commercial cookie	0.625 [10 ounce / 16]	pound	x	$                                         0.80	=	$0.50
Milk chocolate	0.3125	pound	x	$                                         8.00	=	$2.50
Almonds	0.0625	pound	x	$                                       14.00	=	$0.88
Direct Labor #1	0.016666667	hours	x	$                                       12.90	=	$0.22
Direct Labor #2	0.083333333	hours	x	$                                       19.00	=	$1.58
Variable Overhead [1 min + 5 min = 6 min/60min = 0.1 hrs	0.1	hours	x	$                                       32.80	=	$3.28
Fixed manufacturing overhead	0.1		x	$                                       60.00	=	$6.00
Standard Cost per pound						$14.95 = ANSWER