Question

Sepulvada Manufacturing Corporation 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 $4 per pound, but a 2% discount is usually taken. Freight costs are $.15 per pound, and receiving and handling costs are $.10 per pound. The hourly wage rate is $9.00 per hour, but a raise which will average $.25 will go into effect soon. Payroll taxes are $1.00 per hour, and fringe benefits average $2.00 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is 0.2 hours and 0.1 hours, respectively. The standard direct materials price per pound is:_______

Answer 1

Answer:

The standard direct materials price per pound is $4.165

Explanation:

In order to calculate the standard direct materials price per pound we would have to use the following formula:

standard direct materials price per pound=material cost per pound+freight cost per pound+handling cost per pound-discount on total cost.

discount on total cost=2%*$4.25=$0.085

Therefore, standard direct materials price per pound=$4+$0.15+$0.10-$0.085

standard direct materials price per pound=$4.165

The standard direct materials price per pound is $4.165