Steel Slitting Company divides 24 " widths of rolled sheet steel into 2" and 4" widths. The 24 " widths are delivered to Steel Slitting Company by its customers and the new widths are picked up by the customers after slitting. The cut widths plus scrap loss (caused by starting and ending rolls of steel or jams on the slitters) cannot cost the customers more than acquiring the correct widths direct from steel mills. Therefore, Steel Slitting Company uses tight standard costs to stay competitive. If bought directly from steel mills, steel would cost customers the following:

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Size Gauge Cost per Ton 24" 14 $125 24" 12 120 2" 14 136 2" 12 130 4" 12 130 Steel Slitting Company price for slitting a ton of input steel from customers is: Customer Price Size Gauge per Ton, Slit 2" 14 $8.00 2" 12 7.00 4" 12 6.00 Standard and actual slitting costs per input ton for October are as follows: