Stefani Company has gathered the following information about its product
Direct materials. Each unit of product contains 4.5 ponds of materials. The average waste and spoilarge per unit 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 off its suppliers offer. Freight costs average $0.25 per pound.
Direct Labor. Each unit requires 2 hours of labor. Setup. Cleanup and downtime average 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