Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 40-litre containers at a cost of $330 per container. A discount of 3% 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 $400 for an average shipment of one hundred 40-litre containers of Echol.
Use of Echol: The bill of materials calls for 24.70 litres of Echol per bottle of cleaning solvent. About 5% of all Echol used is lost through spillage or evaporation (the 24.70 litres above is the actual content per bottle). In addition, statistical analysis has shown that every 41st bottle is rejected at final inspection because of contamination.
Required:
1. Compute the standard purchase price for one litre of Echol. (Do not round intermediate calculations and round final answer to 2 decimal places.)
standar price _________ ?
2. Compute the standard quantity of Echol (in litres) per saleable bottle of cleaning solvent. (Round intermediate calculations and final answer to 2 decimal places.)
standard quantity price _________ litre ?
Using the data from parts (1) and (2), prepare a standard cost card showing the standard cost of Echol per bottle of cleaning solvent. (Round intermediate calculations and final answers to 2 decimal places.)
Item Standard Quantity Standard Price Standard Cost Per Bottle
Echol_________litres_______per litre ?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Economic Development Finance

Authors: Karl F Seidman

1st Edition

0761927093, 9780761927099

More Books

Students also viewed these Accounting questions

Question

Explain the difference between poverty and scarcity.

Answered: 1 week ago

Question

How does selection differ from recruitment ?

Answered: 1 week ago

Question

8. How are they different from you? (specifically)

Answered: 1 week ago