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In manufacturing its product, City Manufacturing's recipe requires 3 ounces of Material X at a standard cost of $0.20 per ounce. During January 2010, City bought and used 2,000 ounces of Material X at a cost of $0.18 per ounce and made 700 units of product. The company has estimated that it will produce 750 units of product per month.
-What is City's standard quantity of material allowed?

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In manufacturing its product, City Manufacturing's recipe requires 3 ounces of Material X at a standard cost of $0.20 per ounce. During January 2010, City bought and used 2,000 ounces of Material X at a cost of $0.18 per ounce and made 700 units of product. The company has estimated that it will produce 750 units of product per month.
-What is City's standard quantity of material allowed?

Quizplus · Accepted Answer

The standard quantity of material allowed is calculated based on the actual production and the standard material required per unit. Since the company made 700 units and requires 3 ounces per unit, the standard quantity allowed is 700 units * 3 ounces/unit = 2,100 ounces.

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