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.

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...

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