10-7
E10-7 Svenska Pharmicia, a Swedish pharmaceutical company, makes an anticoagulant drug. The main ingredient in the drug is a raw material called Alpha SR40. Information concerning the purchase and use of Alpha SR40 follows: Purchase of Alpha SR40: The raw material Alpha SR40 is purchased in 2-kilogram containers at a cost of 3,000Kr per kilogram. (The Swedish currency is the krona, which is abbreviated as Kr.) Discount terms of 2/10,n/30 are offered by the supplier, and Svenska Pharmicia takes all discounts. Shipping costs, which Svenska Pharmicia must pay, amount to 1,000Kr for an average shipment of ten 2-kilogram containers. Use of Alpha SR40: The bill of materials calls for 6 grams of Alpha SR40 per capsule of the anticoagulant drug. (A kilogram equals 1,000 grams.) About 4% of all Alpha SR40 purchased is rejected as unsuitable before being used to make the anticoagulant drug. In addition, after the addition of Alpha SR40, about 1 out of every 26 capsules is rejected at final inspection, due to defects of one sort or another in the capsule. 1. Compute the standard purchase price for one gram of Alpha SR40. 2. Compute the standard quantity of Alpha SR40 (in grams) per capsule that passes final inspection. (Carry computations to two decimal places.) 3. Using the data from (1) and (2) above, prepare a standard cost card showing the standard cost of Alpha SR40 per capsule of the anticoagulant drug. E10-7 Svenska Pharmicia, a Swedish pharmaceutical company, makes an anticoagulant drug. The main ingredient in the drug is a raw material called Alpha SR40. Information concerning the purchase and use of Alpha SR40 follows: Purchase of Alpha SR40: The raw material Alpha SR40 is purchased in 2-kilogram containers at a cost of 3,000Kr per kilogram. (The Swedish currency is the krona, which is abbreviated as Kr.) Discount terms of 2/10,n/30 are offered by the supplier, and Svenska Pharmicia takes all discounts. Shipping costs, which Svenska Pharmicia must pay, amount to 1,000Kr for an average shipment of ten 2-kilogram containers. Use of Alpha SR40: The bill of materials calls for 6 grams of Alpha SR40 per capsule of the anticoagulant drug. (A kilogram equals 1,000 grams.) About 4% of all Alpha SR40 purchased is rejected as unsuitable before being used to make the anticoagulant drug. In addition, after the addition of Alpha SR40, about 1 out of every 26 capsules is rejected at final inspection, due to defects of one sort or another in the capsule. 1. Compute the standard purchase price for one gram of Alpha SR40. 2. Compute the standard quantity of Alpha SR40 (in grams) per capsule that passes final inspection. (Carry computations to two decimal places.) 3. Using the data from (1) and (2) above, prepare a standard cost card showing the standard cost of Alpha SR40 per capsule of the anticoagulant drug
