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Question 6

Boysen Industries manufactures outdoor paints used for the facade of high rise buildings. The company plans to introduce a new paint variant that is able to withstand harsh weather conditions. The new paint is made by combining Protein D with a solution (Salcomb) which will be heated to boiling point and thereafter, the colouring agent (Texta) is added. The resulting paint will be packaged in 10 litre containers. The initial mix, which is 11 litres in volume, consists of 15 kilograms of Protein D and 8 litres of Salcomb. A reduction in volume by 1 litre happens during the boiling process. The resulting solution is cooled slightly before 3 kilograms of of Texta are added. Texta evaporates so it does not affect the final liquid volume.

The purchase prices of the raw materials used in the manufacture of the new paint variant are as follows:

Protein D	$2.90 per kilogram
Salcomb	$3.50 per litre
Texta	$5.80 per kilogram

Determine the standard material cost of a 10 litre container of the new paint for Boysen Industries.