Question
Required Information Exercise 14-16 (Algo) Developing raw material cost standards LO 8, 9 [The following Information applies to the questions displayed below.] Lakeway Manufacturing
Required Information Exercise 14-16 (Algo) Developing raw material cost standards LO 8, 9 [The following Information applies to the questions displayed below.] Lakeway 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 12 quarts of triphate solution and 2 pounds of sobase granules and boiling the mixture for several minutes. After the solution has cooled, 3 ounces of methage are added. This "recipe" produces 14 quarts of the cleaner, which is then packaged in 1-quart plastic dispenser bottles. Raw material costs are as follows: Triphate solution Sobase granules Methage Bottle $0.34 per quart 0.89 per pound 1.20 per ounce 0.24 each Exercise 14-16 (Algo) 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? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Decrease in selling price. Possible cost Increases during coming year. Spillage/spollage / waste in the manufacturing process. Change In the labor cost.
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