Question
Martin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Information on the purchase and use
Martin Company manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Information on the purchase and use of Echol follows:
Purchase of echol: Echol is purchased in 5-gallon containers at a cost of 110 per container. A discount of 2% is offered by the supplier for payment within 10 days, and Martin Company takes all discounts. Shipping costs, which Martin Company must pay, amount to 220 for an average shipment of 100 5-gallon containers of Echol.
Use of echol: The bill of materials calls for 13.30 quarts of Echol per bottle of cleaning solvent. (There are four quarts in a gallon.) About 5% of all Echol used is lost through spillage or evaporation (the 5.00 quarts above is the actual content per bottle). In addition, statistical analysis has shown that every 21st bottle is rejected at final inspection because of contamination.
The Total cost per 5-gallon container is?
The Standard cost per quart purchased is?
The Standard quantity per saleable bottle of solvent is?
The standard cost of Echol per bottle of cleaning solvent is?
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