Question

1. Pane Corp. manufactures and sells a nutrition drink for children. It wants to develop a standard cost per gallon. The following are required for production of one gallon: Ingredient Lime Kool-Drink Sugar Protein Tablets Water Amount per Gallon 24.0 oz. .72 lb. 2 50 oz. Standard Waste 4% 10% 0% 0% Standard Price $0.15 per oz $0.65 per lb $0.40 per tablet $0.01 per oz Compute the standard usage (quantity) and standard cost of the ingredients for one gallon of the nutrition drink.

Answer 1

Answer:

Standard cost = $5.57

Explanation:

As per the data given in the question,

Standard cost = Standard usage * standard price

Ingredient   Amount/gallon  st. waste   St. usage            St. price      St. cost

Lime          24.0 Oz                4%       .96X=24.0 Oz=25 Oz    0.15        $3.75     kool-drink

Sugar        .72 lb                     10%     .90X=.72 lb = 0.8 lb     $0.65      $0.52

Protein tablets 2                     0%                2                         $0.40      $0.80

Water        50 Oz                    0%                50 Oz                 $0.01       $0.50

Total                                                                                                         $5.57

Total standard cost = $3.75 + $0.52 + $0.80 + $0.50

= $5.57