Jody Jewelry manufactures jewelry. In October Jody is planning to make 500 rings

Question

Jody Jewelry manufactures jewelry. In October Jody is planning to make 500 rings, 400 bracelets, and 210 pendants. Each ring requires 3 ounces of gold and 2 semi-precious stones. Each bracelet requires 4 ounces of gold and 4 semi-precious stones. Each pendant requires 3.5 ounces of gold and 1 semi-precious stone. The company can purchase the 10k gold it uses in its manufacturing for $215 an ounce, and can purchase a lot of 100 semi-precious stones for $3,080. What is the standard cost for direct materials per pendant?

Explanation / Answer

Standard Cost for Direct Materials per Pendant: As per the informatiom given in the question Each pendant requires 3.5 ounces of gold and 1 semi-precious stone Cost of one ounce of Gold $          215.00 Cost of 3.5 ounces gold used in each Pendant $          752.50 Cost of 100 semi-precious stones $      3,080.00 Cost of one semi-precious stone $            30.80 Hence the standard cost for making one Pendant ($752 + $30.80) $          783.30

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