d. $2.17 Oxnard Industries produces a product that requires 2.6 pounds of materi

Question

d. $2.17 Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 3 pounds and 1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $.10 per pound. and recelving and handling costs are s.07 per pound. The hourly wage rate is $12.00 per hour, but a raise which ill average $.30 will go into effect soon Payroll taxes are $1.20 per hour, and fringe benefits average $2 40 per hour. Standard production time is 1 hour per unit. and the allowance for rest periods and setup is.2 hours and 1 hours, respectively Reference: Ref 11-1 The standard direct materials quantity per unit is Select one a. 2.6 pounds b. 2.7 pounds. c. 2.9 pounds d. 3.0 pounds Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The allowance for waste and spoilage per unit is 3 pounds and 1 pounds. respectively The purchase price is S2 per pound but a 2% discount is usually taken. Freight costs are S. 10 per pound, and receiving and handling costs are $.07 per pound. The hourly wa rate is $1200 per hour, but a raise which will average $.30 will go into effect soon. Payroll taxes are $1 20 per hour a frinor benetits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest pericoo

Explanation / Answer

The correct option is option -D.

The standard direct material quanity per unit is

Required pounds+Waste+Spoilage = 2.6+0.3+0.1 =3.0Pounds

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