Agrichar manufactures Insect-Be-Gone. Each bag of the product contains 56 pounds of direct materials. Twenty percent of the materials evaporate during manufacturing. The budget allows the direct materials to be purchased at $5.00 a pound under terms of 2/10, n/30. The company's stated policy is to take all available cash discounts. Determine the standard direct materials cost for one bag of Insect-Be-Gone.

Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 7E: Ottis, Inc., uses 640,000 plastic housing units each year in its production of paper shredders. The...
icon
Related questions
Question

General accounting

Agrichar manufactures Insect-Be-Gone. Each bag of the
product contains 56 pounds of direct materials. Twenty
percent of the materials evaporate during manufacturing.
The budget allows the direct materials to be purchased at
$5.00 a pound under terms of 2/10, n/30. The company's
stated policy is to take all available cash discounts.
Determine the standard direct materials cost for one bag of
Insect-Be-Gone.
Transcribed Image Text:Agrichar manufactures Insect-Be-Gone. Each bag of the product contains 56 pounds of direct materials. Twenty percent of the materials evaporate during manufacturing. The budget allows the direct materials to be purchased at $5.00 a pound under terms of 2/10, n/30. The company's stated policy is to take all available cash discounts. Determine the standard direct materials cost for one bag of Insect-Be-Gone.
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning