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Charles Elliot, called a meeting to decide how to handle the Harrington order without disrupting the schedule. Pat Melton reported, QAnother supplier of raw materials
Charles Elliot, called a meeting to decide how to handle the Harrington order without disrupting the schedule. Pat Melton reported, QAnother supplier of raw materials is willing to ship to us, but we have to commit to buy 18,000 pounds at a total cost of $142,200. He promises that the materials are the same quality as those we normally use. Missy Price reported that she could move Class II labor from another product to help with the extra 8,000 bottles. The standard wage for Class II labor is $16 per direct labor hour. The standard direct materials and labor costs for one bottle of Omnigar are as follows: Direct materials: 1.5 pounds at $8 per pound Direct labor: 1.2 Class III direct labor hours at $14 per direct labor hour At the end of May, Controller Aiden Brown called Charles to discuss the month's results. To get a better picture of the problem, Aiden drew up the following breakdown of the production costs associated with the two different materials: Regular Materials Alternative Materials Direct materials used (in pounds) 18 700
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