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Sunland's Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area
Sunland'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. Sunland'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, $7 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 8 minutes of direct labor in the baking department. The standard labor rates in those departments are $13.20 per direct labor hour (DLH) and $26 per DLH, respectively. Variable overhead is applied at a rate of $37.70 per DLH; fixed overhead is applied at a rate of $60 per DLH.
Calculate the standard cost for a pound of Sunland's double chocolate almond supreme cookies.
Expert Solution
|
Particulars |
Amount |
|
Direct Material : |
|
|
- Cookie mix [(0.80/16)*10] |
$0.50 |
|
- Milk chocolate [(7/16)*5] |
$2.19 |
|
- Almonds [(15/16)*1] |
$0.94 |
|
Direct Labor : |
|
|
- Mixing Department[(13.20/60)*1] |
$0.22 |
|
- Baking Department[(26/60)*8] |
$3.47 |
|
Variable Overhead [(37.70/60)*9] |
$5.66 |
|
Fixed Overhead [(60/60)*9] |
$9.00 |
|
Total Cost per pound |
$21.98 |
{Note: 1 pound = 16 ounces , 1 hour = 60 minutes}
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