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3.a Standard setting (25 points) Jordan Company bottles soda in two liter (1 liter 33.8 ounces) increments. Its product has three direct materials: Soda, a
3.a Standard setting (25 points) Jordan Company bottles soda in two liter (1 liter 33.8 ounces) increments. Its product has three direct materials: Soda, a plastic bottle, and a plastic cap. Given the following information, determine the appropriate total standard cost for materials Jordan Company to use in preparing its budget: Soda Jordan has had problems with their machines and has a spillage rate of 10% which is built into their costing. They can purchase the soda and water mix for S0.012 per ounce. Molded Plastic Each bottle uses 5 ounces of plastic. In an attempt to be environmentally responsible, Jordan uses 75% recycled plastic that costs $0.96 per pound (16 ounces) and 25% first-use plastic that costs $0.72 per pound. Plastic cap The plastic caps are purchased at a cost of Sil per 1.000 caps TOTAL MATERIALS 3.b Action to take (5 points) Management of Jordan Company has determined that it must achieve a maximum raw material cost per bottle of under $1.05 per bottle. Based upon the above information, where should Jordan look for improvement? Explain your reasoning
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