Quincy Farms produces items made from local farm products that are distributed to supermarkets. For many years, Quincy's products have had strong regional sales on the basis of brand recognition: how- ever, other companies have begun marketing similar products in the area, and price competition has become increasingly important. Doug Gilbert, the company's controller, is planning to implement a standard cost system for Quincy and has gathered considerable information from his co-workers on production and material requirements for Quincy's products. Gilbert believes that the use of standard costing will allow Quincy to improve cost control and make better pricing decisions. Problem 10-43 Determining Standard Costs; Ethics (LO 10-1, 10-2) 1. Total standard cost per 10-gallon batch: $30.20 468 Chapter 10 Standard Costing and Analysis of Direct Costs Quincy's most popular product is strawberry jam. The jam is produced in 10-gallon batches, and each batch requires six quarts of good strawberries. The fresh strawberries are sorted by hand before entering the production process. Because of imperfections in the strawberries and normal spoilage, one quart of berries is discarded for every four quarts of acceptable berries. Three minutes is the standard direct-labor time for sorting required to obtain one quart of acceptable strawberries. The acceptable strawberries are then blended with the other ingredients. Blending requires 12 minutes of direct-labor time per batch. After blending, the jam is packaged in quart containers. Gilbert has gathered the follow- ing information from Joe Adams, Quincy's cost accountant. Quincy purchases strawberries at a cost of $.80 per quart. All other ingredients cost a total of S.45 per gallon. . Direct labor is paid at the rate of $9.00 per hour. . The total cost of material and labor required to package the jam is $.38 per quart. Adams has a friend who owns a strawberry farm that has been losing money in recent years. Because of good crops, there has been an oversupply of strawberries, and prices have dropped to $.50 per quart. Adams has arranged for Quincy to purchase strawberries from his friend and hopes that $.80 per quart will help his friend's farm become profitable again.