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13.05.2021 •
Business
The Mischief Makers Inc. manufacturers Loki Staffs (not including the infinity stone). Direct materials: The company purchases the wood for $8.25. A 2% discount is offered when the company commits to a minimum purchase (which it does). Shipping costs are $1.35. Receiving and handling costs for the company amount to $0.65.The company expects to use 1.5 pounds of material per staff. And, after careful research, expects 0.3 pounds for waste and 0.1 pounds for damage/spoilage.Direct labor: The company pays its laborers $16 per hour. Payroll taxes and fringe benefits based on this hourly wage amount to $0.90 and $2.25, respectively.Based on its studies, the company expects actual production time to be 1.0 hours per staff. Other time spent per staff include: 0.2 for setup, 0.2 for cleanup, and 0.1 for rest periods. Manufacturing overhead:The company uses direct labor hours as its base when allocating their overhead costs. The company estimates a variable overhead rate of $3.00 and a fixed overhead rate of $2.83 per direct labor hour. Required: Prepare a standard cost card to help the company calculate the standard cost per staff. Round amounts to two decimal places if necessary.
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