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South Atlantic Chemical Company manufactures industrial chemicals in Rio de Janeiro, Brazil. The company plans to...

South Atlantic Chemical Company manufactures industrial chemicals in Rio de Janeiro, Brazil. The company plans to introduce a new chemical solution and needs to develop a standard product cost. The new chemical solution is made by combining a chemical compound (nyclyn) and a solution (salex), heating the mixture, adding a second compound (protet), and bottling the resulting solution in 11-liter containers. The initial mix, which is 12 liters in volume, consists of 13 kilograms of nyclyn and 10.6 liters of salex. A 1-liter reduction in volume occurs during the boiling process. The solution is cooled slightly before 16 kilograms of protet are added. The addition of protet does not affect the total liquid volume.

The purchase price of the direct materials used in the manufacture of this new chemical solution are given below. (The real, abbreviated R$, is Brazil’s national currency. On the day this problem was written, one real was equivalent to 0.320 U.S. dollar.)

Nyclyn R$ 5.45 per kilogram
Salex R$ 6.50 per liter
Protet R$ 8.30 per kilogram

Required:

Determine the standard material cost of a 11-liter container of the new product. (Round your answer to 2 decimal places.)

Solutions

Expert Solution

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Rate Input Q Total Cost of 11 liter
Rate*Input
Nyclyn R$        5.45 per kilogram 13                               70.85
Salex R$        6.50 per liter 10.6                               68.90
Protet R$        8.30 per kilogram 16                             132.80
Standard Cost of 11 liter                             272.55

ekkarill92 answered 2 years ago
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