Question

Roanoke Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (5,200 bars) are as follows:

Ingredient	Quantity	Price
Cocoa	400 lb	$1.25 per lb
Sugar	80 lb	$0.40 per lb
Milk	120 gal	$2.50 per gal

Determine the standard direct material cost per bar of chocolate

 

Answer 1

Standard cost : The phrase "standard cost" in accounting records refers to the practise of substituting an actual cost for an expected cost. The variation is then shown by the difference between predicted and actual expenses, which is periodically recorded. Target cost and predefined cost are other names for a typical cost.

Calculation of Standard direct materials cost per bar of chocolate

Ingredient	Quantity	Price	Total
Cocoa	400 lb	$1.25 per lb	$500
Sugar	80 lb	$0.40 per lb	32
Milk	120 gal	$2.50 per gal	300
Total cost			$832

 

Calculation of Standard Direct materials cost per bar of chocolate 

Standard Direct materials cost per bar of chocolate = Total cost of materials /  Total bar of chocolates

=$832 / 5,200 bars

=$0.16 per bar

 

 Therefore, the standard direct materials cost per bar of chocolate is $0.16