Brief Exercise 11-2 Tang Company accumulates the following data concerning raw m

Question

Brief Exercise 11-2 Tang Company accumulates the following data concerning raw materials in making one gallon of finished product: (1) Price—net purchase price $3.28, freight-in $0.73, and receiving and handling $0.43. (2) Quantity—required materials 3.66 pounds, allowance for waste and spoilage 0.80 pounds.

Compute the following. (Round answers to 2 decimal places, e.g. 1.25.)

(a) Standard direct materials price per gallon.

$

(b) Standard direct materials quantity per gallon.

pounds (c) Total standard materials cost per gallon.

$

Explanation / Answer

(a)Standard Direct Material price per gallon

Purchase Price                                      =$3.28

Add:Freight                                              =$0.73

Add:Receiving and Handling cost            =$0.43

Standard Direct Material price per gallon=$4.44

(b)Standard direct materials quantity per gallon

Quantity required for one gallon                                    =3.66

Add:Allowance for wastage                                           =0.80

Therefore,Standard direct materials quantity per gallon=4.46

(c)Total standard materials cost per gallon= Standard direct materials quantity per gallon.*Standard direct materials price per gallon.=4.46*4.44=$19.80

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