Question

In: Accounting

Tang Company accumulates the following data concerning raw materials in making its finished product:

Tang Company accumulates the following data concerning raw materials in making its finished product: (1) Price per pound of raw materials—net purchase price $2.50, freight-in $0.50, and receiving and handling $0.40. (2) Quantity per gallon of the finished product—required materials 3.40 pounds, allowance for waste and spoilage 0.60 pounds

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

 

(a)   Standard direct materials price per pound of raw materials.   $

 
(b)   Standard direct materials quantity per gallon.  

pounds
(c)   Total standard materials cost per gallon.

Solutions

Expert Solution

Calculation of Standard Direct materials price per pound of raw materials

Standard Direct materials per pound of raw material = Net purchases price + Freight in + Receiving & Handling Charges

= $2.50 + $0.50 +$0.40

= $3.4

Calculation of Standard Direct materials Quantity per Gallon

Standard Direct materials per Gallon = Required materials + Allowance for waste & Spoilage

=3.40 + 0.60

=4.0 Pounds

Calculation of Total Standard materials Cost per Gallon

Total Standard materials cost per gallon =  Standard Direct materials Quantity per Gallon *  Standard Direct materials per pound of raw materials

=4.0 Pounds * $3.4

=$13.6

 

 

 


(a)Standard Direct materials price per pound of raw materials = $3.4

(b)Standard Direct materials Quantity per gallon = 4.0 pounds

(c)Total Standard materials cost per gallon = $13.6

 

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