Tang Company accumulates the following data concerning raw materials in making o
ID: 2489706 • Letter: T
Question
Tang Company accumulates the following data concerning raw materials in making one gallon of finished product: (1) Price—net purchase price $3.15 per pound, freight-in $0.40 per pound, and receiving and handling $0.32 per pound. (2) Quantity—required materials 3.21 pounds, allowance for waste and spoilage 0.80 pounds.
Compute the following. (Round answers to 2 decimal places, e.g. 1.25.)
(a) Standard direct materials price per pound. $
(b) Standard direct materials quantity per gallon. pounds
(c) Total standard materials cost per gallon. $
Explanation / Answer
(a)
Calculation of Standard direct materials price per pound:
Price—net purchase price
$ 3.15
Add: freight-in
$ 0.40
Standard direct materials price per pound =
$ 3.55
Per pound
(b)
Calculation of Standard direct materials quantity per gallon:
Quantity—required materials
3.21
Add: allowance for waste and spoilage
0.80
Standard direct materials quantity per gallon =
4.01
Pounds
(c)
Calculation of Total standard materials cost per gallon:
Standard direct materials quantity per gallon (A)
4.01
Pounds
Standard direct materials price per pound (B)
$ 3.55
Per pound
Total standard materials cost per gallon = A*B =
$ 14.24
Per Gallon
(a)
Calculation of Standard direct materials price per pound:
Price—net purchase price
$ 3.15
Add: freight-in
$ 0.40
Standard direct materials price per pound =
$ 3.55
Per pound
(b)
Calculation of Standard direct materials quantity per gallon:
Quantity—required materials
3.21
Add: allowance for waste and spoilage
0.80
Standard direct materials quantity per gallon =
4.01
Pounds
(c)
Calculation of Total standard materials cost per gallon:
Standard direct materials quantity per gallon (A)
4.01
Pounds
Standard direct materials price per pound (B)
$ 3.55
Per pound
Total standard materials cost per gallon = A*B =
$ 14.24
Per Gallon
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