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 $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.

Answer 1

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