Spragg Corporation is developing standards for its products. One product requires an input that is purchased for $62.00 per kilogram from the supplier. By paying cash, the company gets a discount of 6% off this purchase price. Shipping costs from the supplier's warehouse amount to $4.45 per kilogram. Receiving costs are $0.50 per kilogram. Each unit of output requires 0.48 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 0.13 kilogram of this input for each unit of output.
Required:
a. Determine the standard price per kilogram of this input. Show your work!
b. Determine the standard kilograms of this input per unit of output. Show your work!

Question

Quizplus · Accepted Answer

The Answer of Spragg Corporation is developing standards for its products. One product requires an input that is purchased for $62.00 per kilogram from the supplier. By paying cash, the company gets a discount of 6% off this purchase price. Shipping costs from the supplier's warehouse amount to $4.45 per kilogram. Receiving costs are $0.50 per kilogram. Each unit of output requires 0.48 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 0.13 kilogram of this input for each unit of output.
Required:
a. Determine the standard price per kilogram of this input. Show your work!
b. Determine the standard kilograms of this input per unit of output. Show your work!

Spragg Corporation Is Developing Standards for Its Products