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$5.00 ACCOUNTING HELP
- From Mathematics: General-Mathematics
- Closed, but you can still post tutorials
- Due on Dec. 15, 2008
- Asked on Dec. 14, 2008 at 09:25:07AM
Q:Developing raw material cost standards Ozark Manufacturing Co. Manufacturers and sells household cleaning products. The companys research department has developed a new cleaner for which a standard cost must be determined. The new cleaner is made by mixing 18 quarts of triphate solution and 8 pounds of sobase granules and boiling the mixture for several minutes. After the solution has cooled, 4 ounces of methage are added. This recipe produces 15 quarts of the cleaner, which is then packaged in one quart plastic dispenser bottles. Raw material costs are:
Triphate solution $.45 per quart
Sobase granules .90 per pound
Methage 1.40 per ounce
Bottle .25 each
Required: a. Using the preceding data, calculate the raw material cost for one bottle of the new cleaner.
b. Assume that the preceding costs are the current best estimates of the costs at which required quantities of the raw material can be purchased. Would you recommend that any other factors be considered in establishing the raw material cost standard for the new cleaner?
c. Explain the process that would be used to develop the direct labor cost standard for the new product.
