Ozark Manufacturing Co. manufactures and sells household cleaning products. The

Question

Ozark Manufacturing Co. manufactures and sells household cleaning products. The company's research department has developed a new cleaner for which a standard cost must be determined. The new cleaner is made by mixing 18 quarts of triphate solution and 8 pounds of sobase granules and boiling the mixture for several minutes. After the solution has cooled, 4 ounces of methage are added. This "recipe" produces 15 quarts of the cleaner, which is then packaged in one-quart plastic dispenser bottles. Raw material costs are Triphate solution $0.45 per quart Sobase granules 0.90 per pound Methage 1.40 per ounce Bottle 0.25 each Need to the answer to Using the preceding data, calculate the raw material cost for one bottle of the new cleaner. Cost per bottle ___?

Explanation / Answer

So 15 Quart of cleaner requires :- 18Q of Triphate Soln = 18*$0.45 = $8.10 8Lb of Sobase = 8*$0.90 = $7.20 4 Oz of Methage = 4*$1.40 = $5.60 ----------------------------------------- Total Raw Mat cost for 15Q = $20.90 SO Per Q cost = $20.90/15 = $1.39 Add cost of 1 Bottle = $0.25 ------------------------------------- Cost per bottle = $1.64

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