Tang Company accumulates the following data concerning raw materials in making o

Question

Tang Company accumulates the following data concerning raw materials in making one gallon of finished product: (1) Price—net purchase price $2.42, freight-in $0.58, and receiving and handling $0.29. (2) Quantity—required materials 2.80 pounds, allowance for waste and spoilage 0.88 pounds.

Compute the following. (Round answers to 2 decimal places, e.g. 1.25.)

(a) Standard direct materials price per gallon. $____________________ (b) Standard direct materials quantity per gallon. _____________________ pounds (c) Total standard materials cost per gallon $____________________

Explanation / Answer

Net Purchase Price =           $2.42

                                                Freight in                               $0.58
                                           Receiving and handling    $0.29

                                                                                       ---------

                                                                                                $3.29

       (b) Standard direct materials quantity per gallon.

                Net Required Quantity after wastage     2.80

                Add: Wastage                                                    0.88

                                                                                                ------

                                                                                                3.68 pounds

      (c) Total standard materials cost per gallon :

                  

Standard direct materials price per gallon. X Standard direct materials quantity per gallon.

   =$3.29 x 3.68=$12.11

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