Crazy Delicious Inc. produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (5,000 bars) are as follows:IngredientQuantityPriceCocoa500 lbs.$1.40 per lb.Sugar100 lbs.$0.50 per lb.Milk250 gal.$1.60 per gal.Determine the standard direct materials cost per bar of chocolate.

Standard cost: In the accounting records, the term standard cost refers to the practice of…

Answered: Crazy Delicious Inc. produces chocolate…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Crazy Delicious Inc. produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (5,000 bars) are as follows:

Ingredient	Quantity	Price
Cocoa	500 lbs.	$1.40 per lb.
Sugar	100 lbs.	$0.50 per lb.
Milk	250 gal.	$1.60 per gal.

Determine the standard direct materials cost per bar of chocolate.

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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