Spragg Corporation Is Developing Standards for Its Products

question 10

Essay

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!

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Definitions:

Brake Pedal Free Play

The distance which a brake pedal can be pressed before the brake mechanism starts to engage.

Petroleum-Based Fluids

Fluids derived from petroleum used in various applications, including lubricants, solvents, and hydraulic fluids.

Rubber Seals

Flexible components made of rubber, designed to prevent leaks of fluids or gases between different parts.

ISO Flares

Refers to a type of flared tube fitting standard set by the International Organization for Standardization, commonly used in hydraulic and pneumatic systems.