Ozark Manufacturing Co. manufactures and sells household cleaning products. The company's research department has developed a new cleaner for which a standard cost must be determined. The new cleaner is made by mixing 18 quarts of triphate solution and 8 pounds of sobase granules and boiling the mixture for several minutes. After the solution has cooled, 4 ounces of methage are added. This "recipe" produces 15 quarts of the cleaner, which is then packaged in one-quart plastic dispenser bottles. Raw material costs are:

Triphate solution	$	0.45	per quart
Sobase granules		0.90	per pound
Methage		1.40	per ounce
Bottle		0.25	each

4.

value: 6.00 points

E14-8 Part b

b)	Assume that the preceding costs are the current best estimates of the costs at which required quantities of the raw material can be purchased. What other factors would you recommend to be considered in establishing the raw material cost standard for the new cleaner? (Select all that apply.)

	Decrease in selling price
	Possible cost increases during coming year
	Spillage / spoilage / waste in the manufacturing process
	Change in the labor cost