Breakmorning Corporation produces a product that requires 2.6 pounds of materials per unit. The allowance for waste is 0.3 pounds; the allowance for spoilage is 0.1 pounds. The purchase price is $4 per pound, but a 2% discount is always taken. Freight costs are $0.15 per pound, and receiving and handling costs are $0.10 per pound. The standard direct materials price per pound is ___.

Question

Business

Alaina Bradley

4 November, 02:28

Breakmorning Corporation produces a product that requires 2.6 pounds of materials per unit. The allowance for waste is 0.3 pounds; the allowance for spoilage is 0.1 pounds. The purchase price is $4 per pound, but a 2% discount is always taken. Freight costs are $0.15 per pound, and receiving and handling costs are $0.10 per pound. The standard direct materials price per pound is ___.

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Answers (1)

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Louis Charles · Answer 1

Total = $4.33

Explanation:

Giving the following information:

Breakmorning Corporation produces a product that requires 2.6 pounds of materials per unit. The allowance for waste is 0.3 pounds; the allowance for spoilage is 0.1 pounds. The purchase price is $4 per pound, but a 2% discount is always taken. Freight costs are $0.15 per pound and receiving and handling costs are $0.10 per pound.

Purchase price = 4*0.98 = 3.92

Allowance for waste = (0.03*3.92) = 0.1176

Allowance for spoilage = (0.01*3.92) = 0.0392

Freight = 0.15

Receiving and handling = 0.10

Total = $4.33