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Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Oxnard Industries produces a product that requires 2.6 pounds of materials per unit. The
allowance for waste and spoilage per unit is .3 pounds and .1 pounds, respectively. The
purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $.10
per pound, and receiving and handling costs are $.07 per pound. The hourly wage rate is
$12.00 per hour, but a raise which will average $.30 will go into effect soon. Payroll taxes
are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time
is 1 hour per unit, and the allowance for rest periods and setup is .2 hours and .1 hours,
respectively.
The standard direct labor rate per hour is $
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