Mama Fran'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. Mama Fran'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, $4.00 per pound of milk chocolate, and $12.00 per pound of almonds. Each pound of cookies requires 1 minute of direct labor in the mixing department and 2 minutes of direct labor in the baking department. The standard labor rates in those departments are $14.40 per direct labor hour (DLH) and $18.00 per DLH, respectively. Variable overhead is applied at a rate of $32.40 per DLH; fixed overhead is applied at a rate of $60.00 per DLH. Calculate the standard cost for a pound of Mama Fran's double chocolate almond supreme cookies?

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Business

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14 April, 13:29

Mama Fran'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. Mama Fran'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, $4.00 per pound of milk chocolate, and $12.00 per pound of almonds. Each pound of cookies requires 1 minute of direct labor in the mixing department and 2 minutes of direct labor in the baking department. The standard labor rates in those departments are $14.40 per direct labor hour (DLH) and $18.00 per DLH, respectively. Variable overhead is applied at a rate of $32.40 per DLH; fixed overhead is applied at a rate of $60.00 per DLH. Calculate the standard cost for a pound of Mama Fran's double chocolate almond supreme cookies?

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Ally Rice · Answer 1

Standard cost per pound = $34.21

Explanation:

The standard cost is the sum of direct material, direct labor, and total overhead. We will calculate each separate.

Direct material:

10 ounces cookie mix for $0.80 = $8

5 ounces of milk chocolate for $4 = $20

1 ounce of almonds for $12 the pound = $0.75

1 pound = 16 ounces

1 ounce = 0.0625*$12 = $0.75

Direct labor:

1 minute in the mixing department

2 minutes in the baking department.

Mixing = $14.40 * (1/60) = $0.24

Baking = $18 * (2/60) = $0.6

Overhead:

Variable overhead is applied at a rate of $32.40 per DLH

Fixed overhead is applied at a rate of $60.00 per DLH.

Variable = 32.40 * (3/60) = $1.62

Fixed = 60 * (3/60) = $3

Standard cost per pound = (8 + 20 + 0.75) + (0.24 + 0.6) + (1.62 + 3) = $34.21