Lakeway Manufacturing Co. manufactures and sells household cleaning products. Th

Question

Lakeway Manufacturing Co. manufactures and sells household cleaning products. The company's research department has developed a new cleaner for which a standard cost must be determined. The new cleaner Is made by mixing 11 quarts of trlphate solution and 4 pounds of sobase granules and boiling the mixture for several minutes. After the solution has cooled. 2 ounces of methage are added. This 'recipe* produces 10 quarts of the dcaner. which is then packaged in 1-quart plastic dispenser bottles. Raw material costs are:

Explanation / Answer

cost per bottle = .866 + .12   = $ .986 per bottle

Triphate solution (11 *.3) 3.3 sobase     (4*.74) 2.96 Methage (2*1.2) 2.40 Total cost 8.66 Quart product 10 cost per quart   (8.66/ 10) .866

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