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Kouri Corporation is developing standards for its products. One product requires an input that is purchased for $85.00 per kilogram from the supplier. By paying cash, the company gets a discount of 4% off this purchase price. Shipping costs from the supplier's warehouse amount to $4.62 per kilogram. Receiving costs are $0.55 per kilogram. Each unit of output of the product requires 0.74 kilogram of this input. The allowance for waste and spoilage is 0.03 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.

Brewer - Chapter 008

  • 34.

    The standard price per kilogram of this input should be:

    • a.

      $85.00

    • B.

      $86.77

    • c.

      $83.23

    • d.

      $93.57

  • 35.

    The standard quantity in kilograms of this input per unit of output should be:

    • a.

      0.71

    • b.

      0.58

    • C.

      0.90

    • d.

      0.74

Garrigus Corporation is developing direct labor standards. The basic direct labor wage rate is $14.00 per hour. Employment taxes are 10% of the basic wage rate. Fringe benefits are $3.53 per direct labor-hour. A particular product requires 0.74 direct labor-hours per unit. The allowance for breaks and personal needs is 0.05 direct labor-hours per unit. The allowance for cleanup, machine downtime, and rejects is 0.13 direct labor-hours per unit.

Brewer - Chapter 008

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