Question

Question 1 View Policies Current Attempt in Progress 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 $0.30, and receiving and handling $0.20. (2) Quantity per gallon of finished product-required materials 3.60 pounds, allowance for waste and spoilage 0.90 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

Tang Company Standard direct materials price per gallon net purchase price + freight-in + receiving and handling 2.50 +0.30 +0.20 = $3.00 Standard direct materials quantity per gallon 3.60 pounds, allowance for waste and spoilage 0.90 pounds = 4.50 pounds Total standard materials cost per gallon $3.00 * 4.50 = $13.50 Bing Company a) Standard direct labour rate per hour: $15.90 hourly wage rate + $0.50 payroll taxes + $1.70 fringe benefits = $18.10 Hence, standard direct labour rate per hour = $18.10 b) Standard direct labor hours per gallon: 1.60 hours actual production time + 0.30 hours rest periods and cleanup +0.20 hours setup and downtime = 2.10 hours. Hence, standard direct hours per gallon = 2.10 hours c) Standard labour cost per gallon: Standard labour cost per gallon = standard direct hours per gallon *standard direct labour rate per hour = 2.10 hours $18.10 = $38.01 Standard labour cost per gallon =$38.01 Parsons Company Direct Materials = 2200 units x 1 pound x $6.20 = $13640 Direct Labour = 2200 units x 0.5 x $14 = $15400 Overhead = $15400 x 70% = $10780 Standard cost of one unit of product = ( 13640 + 15400 + 10780) / 2200 units = $18.10 per unit