Question

ABC Company currently pays $5 per gallon for raw material X and $3 per pound for raw material Y. Product Z production standard requires 5 gallons of raw material X and 10 pounds of raw material Y. The standard raw material cost for Product Z is $_____ per unit.

Answer 1

The standard raw material cost for Product Z is $55 per unit, calculated by adding the cost of 5 gallons of raw material X at $5 per gallon and the cost of 10 pounds of raw material Y at $3 per pound.

Step-by-step explanation:

The question asks us to determine the standard raw material cost for Product Z per unit based on the given prices of raw materials X and Y, and the quantities required for the production of Product Z. Raw material X costs $5 per gallon and raw material Y costs $3 per pound. Product Z requires 5 gallons of raw material X and 10 pounds of raw material Y. Therefore, the calculation is straightforward:

Cost of raw material X for Product Z: 5 gallons x $5/gallon = $25

Cost of raw material Y for Product Z: 10 pounds x $3/pound = $30

Total standard raw material cost for Product Z: $25 + $30 = $55 per unit