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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Standard direct materials cost per unit

 Roanoke Company produces chocolate bars. The primary materials used in producing chocolate bars are cocoa, sugar, and milk. The standard costs for a batch of chocolate (5,200 bars) are as follows:

Ingredient Quantity Price
Cocoa 400lb. $1.25per lb.
Sugar 80 lb. $0.40 per lb.
Milk 120 gal. $2.50 per gal.

 Determine the standard direct materials cost per bar of chocolate.

To determine

Standard cost:

In the accounting records, the term standard cost refers to the practice of replacement of an expected cost for an actual cost. Then the difference between the expected costs, and actual costs showing the variance are also recorded periodically. A standard costs is also known as target cost or predetermined cost.

To determine: The standard direct materials cost per bar of chocolate.

Explanation

Determine the standard direct materials cost per bar of chocolate.

Ingredient Quantity Price Total
Cocoa 400 lb. $1.25 per lb. $500
Sugar 80 lb. $0.40 per lb. 32
Milk 120 gal. $2.50 per gal. 300
Total cost     $832

Table (1)

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