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 $2.30, freight-in $0.20, and receiving and handling $0.10. (2) Quantity—required materials 3.6 pounds, allowance for waste and spoilage 0.4 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 materials price per gallon = net purchase price +  freight-in + receiving and handling

Standard direct materials price per gallon.= 2.30 + 0.20 + 0.10

Standard direct materials price per gallon.= $ 2.60

b)Standard direct materials quantity per gallon = Quantity—required materials + allowance for waste and spoilage

Standard direct materials quantity per gallon = 3.6 + 0.4

Standard direct materials quantity per gallon = 4 Pound

c)

Total standard materials cost per gallon = Standard direct materials price per gallon*Standard direct materials quantity per gallon

Total standard materials cost per gallon = 2.60*4

Total standard materials cost per gallon = $ 10.40

Answer

a) Standard direct materials price per gallon. $ 2.60 (b) Standard direct materials quantity per gallon. 4 pounds (c) Total standard materials cost per gallon. $ 10.40

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