Problem: Fruit Snacks Corp Inc. makes lunchbox style fruit snacks. The owner of the company is setting up a standard cost system, and she has collected the following data for one of the companys products-fruit chews.
The data below pertain only to the fruits used in the product:
Material requirements, kilograms of fruits per dozen bags 0.95 kilograms
Allowance for waste, kilograms of fruits per dozen bags 0.06 kilograms
Allowance for rejects, kilograms of fruits per dozen bags 0.04 kilograms
Purchase price, fruit $7.50 per kilogram
Purchase discount 4% of purchase price
Shipping cost from the supplier $0.30 per kilogram
Receiving and handling cost $0.10 per kilogram
Q1. Determine the standard price of a kilogram of fruits. Show computations.
Q2. Determine the standard quantity of fruits for one dozen bags. Show computations.