Question

In: Accounting

Danny's Delights is a wholesales bakery. Danny makes a variety of baked Goods, which he sells...

Danny's Delights is a wholesales bakery. Danny makes a variety of baked Goods, which he sells to restaurants and grocery stores. His best-selling item is a peanut butter cookie. The recipe calls for 1 cup of peanut butter, 1 cup of sugar and 1 egg. Each recipe makes a batch of one dozen cookies. Danny's standard direct materials cost for each batch of cookies is $0,90 for peanut butter, $0.15 for sugar and $0.10 for an egg. In additiion, the cookies are packaged by the dozen in cardboard containers costing $0.25 each. One batch of cookies requires 4 minutes preparation time, 8 minutes of cooking time, and 3 minutes of packaging time. The standared wage rate is $8 per hour. Overhead is applied at 50% of direct labors cost.

Required

Calculate the standerd cost for a batch (1 dozen) of peanut butter cookies

Direct material per batch $

Direct labor per batch $

Manufacturing Overhead per batch $

Solutions

Expert Solution

Solution:
Direct material per batch $1.40
Direct labor per batch    $2.00
Manufacturing Overhead per batch   $1.00
The standard cost for a batch (1 dozen) of peanut butter cookies $4.40
Working Notes:
Direct material per batch $1.40 a
[cost of material required for a batch of cookies]
[1 cup butter + 1 cup sugar + 1 egg + containers costing each]
[$0.90+$0.15+$0.10+$0.25 =$1.40]
Direct labor per batch    $2.00 b
[time required per batch x Standard labor rate per hour]
[preparation + cooking + packaging] x $8 per hour
[(15 minute x 1/60) hour x $8 per hour =$2]
Manufacturing Overhead per batch   $1.00 c
[50% of Labor cost]
[50% x $2=$1]
The standard cost for a batch (1 dozen) of peanut butter cookies $4.40 d=a+b+c
Please feel free to ask if anything about above solution in comment section of the question.

ekkarill92 answered 2 years ago
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