Question

Exercise 23-3

Stefani Company has gathered the following information about its product.

Direct materials: Each unit of product contains 4.20 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.70 pounds. Materials cost $1 per pound, but Stefani always takes the 2.00% cash discount all of its suppliers offer. Freight costs average $0.45 per pound.

Direct labor. Each unit requires 1.60 hours of labor. Setup, cleanup, and downtime average 0.20 hours per unit. The average hourly pay rate of Stefani’s employees is $12.30. Payroll taxes and fringe benefits are an additional $2.40 per hour.

Manufacturing overhead. Overhead is applied at a rate of $6.60 per direct labor hour.

Compute Stefani’s total standard cost per unit. (Round answer to 2 decimal places, e.g. 1.25.)

Total standard cost per unit

Answer 1