Susie owns a small manufacturing company. Cold As Snow, that makes ice packs for

Question

Susie owns a small manufacturing company. Cold As Snow, that makes ice packs for use in coolers. She purchases the plastic for her packs in bulk orders for a price of $64.14. Each order of plastic makes 150 packs. She purchases the snow for her packs in bulk orders for a price of $111.20. Each order of snow makes 80 packs. In a time study, her three workers averaged 5, 8, and 10 minutes respectively to prepare each plastic; 3,2, and 7 minutes respectively to prepare the snow for one pack; and 4,5, and 3 minutes respectively to assemble the prepared pieces into a finished ice pack. The workers are paid $12.40 per hour. What is the prime cost for each ice pack?

Explanation / Answer

Plastics for packs 64.14 no. of packs 150 Plastic cost per pack $0.43 per pack Snow 111.2 no. of packs 80 Snow cost per pack $1.39 per pack Total Direct material cost $1.82 per pack Labor cost time Plastic      7.67 snow 4 assemble 4 total time    15.67 labor cost 12.4 per hour LC per pack      3.24 DM $1.82 DL      3.24 Prime cost $5.06 per pack

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