White, Inc Each Container of the Chemical Product Contains 5

question 125

Multiple Choice

White, Inc. produces a chemical product whose primary component is purchased on credit and any discounts are always taken. The following material and labour elements make up the costs of the product: $$\begin{array} { l r } \text { Purchase price for material } & \$ 30 \text { per litre } \\\text { Freight and handling } & \$ 130 \text { per } 100 \text { litres }\end{array}$$ Each container of the chemical product contains 5.7 quarts of material. During the process 5% of the material is lost due to waste. Each container of product also requires 1.2 hours of labour. Each day 2 hours are taken for set-up, cleaning, and breaks. Also, the wage rate is $15 per hour and fringes/payroll taxes are 20% of wages. Clients can take a 3% discount if they pay invoices within 10 days; otherwise, the entire invoice amount is due within 30 days. 1 litre equals 4 quarts.
The standard rate per hour is:

• A) $18
• B) $28.80
• C) $12
• D) $21.60

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