Kimm Company has gathered the information shown below about

Kimm Company has gathered the information shown below about its product.

Direct materials. Each unit of product contains 4.90 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.30 pounds. Materials cost $5 per pound, but Kimm always takes the 4.28% cash discount all of its suppliers offer. Freight costs average $0.44 per pound.

Direct labor. Each unit requires 1.40 hours of labor. Setup, cleanup, and downtime average 0.23 hours per unit. The average hourly pay rate of Kimm’s employees is $11.50. Payroll taxes and fringe benefits are an additional $3.90 per hour.

Manufacturing overhead. Overhead is applied at a rate of $7.80 per direct labor hour.

Compute Kimm’s total standard cost per unit. (Round standard costs to 2 decimal places, e.g. 2.75.)

Kimm Company has gathered the information shown below about its product. Direct materials. Each unit of product contains 4.90 pounds of materials. The average waste and spoilage per unit produced under normal conditions is 0.30 pounds. Materials cost $5 per pound, but Kimm always takes the 4.28% cash discount all of its suppliers offer. Freight costs average $0.44 per pound. Direct labor. Each unit requires 1.40 hours of labor. Setup, cleanup, and downtime average 0.23 hours per unit. The average hourly pay rate of Kimm’s employees is $11.50. Payroll taxes and fringe benefits are an additional $3.90 per hour. Manufacturing overhead. Overhead is applied at a rate of $7.80 per direct labor hour. Compute Kimm’s total standard cost per unit. (Round standard costs to 2 decimal places, e.g. 2.75.)

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Solution

4.90 + 0.30 = 5.20 pounds of materials is needed for each unit

5.20 x $2 = $10.4 normal materials is cost per unit

10.4 x 0.9572 = $9.95488 is with discount

5.20 x 0.44 = $2.288 is freight cost per unit

1.40 + 0.23 = 1.63 is direct labor hours per unit

1.63 x (10.40 + 3.90) = $23.309 is labor per unit

1.63 x 7.80 = $12.714 is overhead per unit

standard cost per unit is $9.95488 +$23.309+$12.714=$45.97788

Approximated to $ 46