Question

Swifty Corporation Produces a product that requires 2.9 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.3 pounds and 0.2 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.1 per pound, and receiving and handling costs are $0.1 per pound. The hourly wage rate is $12 per hour, but a raise which will average $0.30 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 0.2 hours and 0.1 hours, respectively. The standard direct materials quantity per unit is:______.

a. 3.1 pounds.

b. 3.4 pounds.

c. 3.2 pounds.

d. 2.9 pounds.

Answer 1

b. 3.4 pounds

Step-by-step explanation:

Swifty Corporation

Product requires 2.9 pounds of materials per unit

Add Allowance for waste per unit is 0.3 pounds

Add Spoilage per unit 0.2 pounds

Standard Quantity is = 2.9+ 0.3+ 0.2= 3.4 pounds

The standard quantity per unit for direct materials should reflect the amount for each unit of finished product as well as allowance for unavoidable waste, spoilage and other normal inefficiencies