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Question 2 [ 6 points ] NorthCo manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Information
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NorthCo manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Information
concerning the purchase and use of Echol follows:
Purchase of Echol. Echol is purchased in quart containers at a cost of $ per container. A discount of is offered by the supplier
for payment within days, and NorthCo takes all discounts. Shipping costs, which NorthCo must pay, amount to $ for an average
shipment of quart containers of Echol.
Use of Echol. The bill of materials calls for quarts of Echol per bottle of cleaning solvent. About of all Echol used is lost through
spillage or evaporation the quarts above is the actual content per bottle In addition, statistical analysis has shown that every st
bottle is rejected at final inspection because of contamination.
Please make sure your final answers are accurate to decimal places.
a Compute the standard purchase price for one quart of Echol.
Standard purchase price $
b Compute the standard quantity of Echol in quarts per salable bottle of cleaning solvent.
Standard quantity quart per salable bottle
c Using the data from a and b above, prepare a standard cost card showing the standard cost of Echol per bottle of cleaning solvent.
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