Question

Culver Company accumulates the following data concerning raw materials in making one gallon of finished product. (1) Price—net purchase price $2.70, freight-in $0.20, and receiving and handling $0.10. (2) Quantity—required materials 3.90 pounds, allowance for waste and spoilage 0.40 pounds.

Compute the following. (Round answers to 2 decimal places, e.g. 1.25.)

(a)		Standard direct materials price per gallon.		enter a dollar amount rounded to 2 decimal places
(b)		Standard direct materials quantity per gallon.		enter an amount of pounds rounded to 2 decimal places	pounds
(c)		Total standard materials cost per gallon.		enter a dollar amount rounded to 2 decimal places

Answer 1

Answer- a)- Standard direct materials price per gallon = Net purchase price + Freight-in + Receiving and

Handling

= $2.70 +$0.20+$0.10

= $3.00

b)- Standard direct materials quantity per gallon = Materials required in pounds+ Allowance of waste and spoilage

= 3.90 pounds + 0.40 pounds

= 4.30 pounds

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

= $3.00 *4.30 pounds

= $12.90 per gallon