Question

Sheridan'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. Sheridan'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 $15 per pound of almonds. Each pound of cookies requires 1 minute of direct labor in the mixing department and 3 minutes of direct labor in the baking department. The standard labor rates in those departments are $13.50 per direct labor hour (DLH) and $29 per DLH, respectively. Variable overhead is applied at a rate of $36.70 per DLH; fixed overhead is applied at a rate of $60 per DLH. Calculate the standard cost for a pound of Sheridan's double chocolate almond supreme cookies. (Round answer to 2 decimal places, e.g. 3.51.)

Answer 1

Answer: Standard cost per pound= $7.965.7

Explanation:

Given Data:

Recipe requirements = 10ounce

Direct material cost = $0.80/cookies, $4/pound of milk, $15/chocolate

Standard labor rate = $13.50 direct labor/hr & $29/ DLH

Variable overhead = 36.70/DLH

Fixed overhead = $60/DLH

therefore:

DM1 + DM2 = DM Cost perPound

DM1 = 10ounce x 0.8/16ounce = $0.5

DM2= 5ounce x 4/16ounce = $1.25

DM3= 1ounce x 12/16ounce = $0.75

DL1 = 1 min x 14.40/60 min = $0.24

DL2= 2 min x 18/60 min = $0.6Var.

MOH = $32.40Var. MOH + Fixed MOH

= MOHFixed MOH = 60 x 3min/60min = $3

Standard cost per pound= $7.965.7