Aunt Molly's Old-Fashioned Cookies bakes cookies for retail stores. The
company's best-selling cookie is chocolate nut supreme, which is marketed as
a gourmet cookie and regularly sells for $8.00 per pound. The standard cost
per pound of chocolate nut supreme, based on Aunt Molly's normal monthly
production of 400,000 pounds, is as follows:
Unit Cost ($)
0.02 per oz.
0.15 per oz
0.50 per oz
14.40 per hr.
18.00 per hr
32.40 per hr.
Total Standard cost per pound
*Direct-labor rates include employee benefits
# Applied on the basis of direct-labor hours,
Aunt Molly's management accountant, Karen Blair, prepares monthly budget
reports based on these standard costs. April's contribution report, which
compares budgeted and actual performance, is shown in the following