Harnish Corporation is developing standards for its products. One product requires an input that is purchased for $55.00 per kilogram from the supplier. By paying cash, the company gets a discount of 8% off this purchase price. Shipping costs from the supplier's warehouse amount to $5.17 per kilogram. Receiving costs are $0.28 per kilogram. Each unit of output of the product requires 0.75 kilogram of this input. The allowance for waste and spoilage is 0.04 kilogram of this input for each unit of output. The allowance for rejects is 0.11 kilogram of this input for each unit of output.
-The standard quantity in kilograms of this input per unit of output should be:
A) 0.75
B) 0.71
C) 0.90
D) 0.60

Question

Quizplus · Accepted Answer

The standard quantity of input per unit of output includes the required input, waste, spoilage, and rejects. Therefore, it is 0.75 kg (required) + 0.04 kg (waste/spoilage) + 0.11 kg (rejects) = 0.90 kg.

Harnish Corporation Is Developing Standards for Its Products