Sheffield Corp. produces a product that requires 2.6 pounds of materials per uni

Question

Sheffield Corp. produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.1 pounds, respectively. The purchase price is $1 per pound, but a 2% discount is usually taken. Freight costs are $0.3 per pound, and receiving and handling costs are $0.06 per pound. The hourly wage rate is $12 per hour, but a raise which will average $0.3 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is 0.2 hours and 0.1 hours, respectively.

The standard direct materials price per pound is

$1.00. $1.34. $1.36. $0.98.

Explanation / Answer

Standard direct material purchase price = purchase price $1 - 2 discount + freight cost + receiving and haldling cost

= 1 - (1*2) + 0.3 + 0.06 = $1.34 per pound

Correct option is $1.34

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.