Question

Tang Company accumulates the following data concerning raw materials in making its finished product: (1) Price per pound of raw materials—net purchase price $3.00, freight-in $0.50, and receiving and handling $0.20. (2) Quantity per gallon of finished product—required materials 3.50 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 of raw materials. $enter a dollar amount rounded to 2 decimal places (b) Standard direct materials quantity per gallon. enter an amount of pounds rounded to 2 decimal places pounds (c) Total standard materials cost per gallon. $enter a dollar amount rounded to 2 decimal places

Answer 1

Answer and Explanation:

The computation is shown below:

(a) Standard direct materials price per pound of raw materials is

= Purchase price + freight in + receiving and handling

= $3 + $0.50 + $0.20

= $3.70

(b) Standard direct materials quantity per gallon is

= Required material + allowance for waste and spoilage

= 3.50 pounds + 0.80 pounds

= 4.30 pounds

(c) Total Standard direct materials cost per gallon is

= Standard direct materials price per pound of raw materials × Standard direct materials quantity per gallon

= $3.70 × 4.30 pounds

= $15.91

We simply applied the above formulas