Acompany accumulates the following data concerning raw materials in making one gallon of finished product: (1) price-net purchase price $2.20, freight-in $0.20 and receiving and handling $0.10. (2) quantity-required materials 2.6 pounds, allowance for waste and spoilage 0.4 pounds. compute the following. 1. standard direct materials price per gallon. 2. standard direct materials quantity per gallon. 3. total standard materials cost per gallon. a. b. (pounds) c.

Hence,

1. $2.5

2. 3 pounds

3. $7.5

Explanation:

1. The computation of standard direct material price per gallon is shown below:

=Price-net purchase price + freight-in + receiving and handling

= $2.20 + $0.20 +$0.10

= $2.5

Thus, the standard direct material price per gallon is $2.5

2.  The computation of standard direct material quantity per gallon is shown below:

= Quantity required material + Allowance for waste and spoilage

= 2.6 +0.4

= 3 pounds

3. The computation of total standard material cost per gallon is computed below:

= Standard direct materials price per gallon × Standard direct materials quantity per gallon

= $2.5 × 3

= $7.50

Hence,

1. $2.5

2. 3 pounds

3. $7.5

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