Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows:The standard cost per ounce of EPP (rounded to two decimal places) is:
A) $6.22.
B) $6.30.
C) $6.65.
D) $6.84.
E) Greater than $7.00.

Question

Roncy Manufacturing uses enhanced powder plastics (EPP) to manufacture a high-pressure board, Dura-Plastic. Information concerning its operation in June was as follows:The standard cost per ounce of EPP (rounded to two decimal places) is:
A) $6.22. 
B) $6.30. 
C) $6.65. 
D) $6.84. 
E) Greater than $7.00.

Quizplus · Accepted Answer

To find the standard cost per ounce of EPP, we need to use the following formula:
Standard Cost per Ounce of EPP = (Standard EPP Cost per Batch) / (Standard Batch Size) * (Standard EPP usage per ounce)
From the given information, we can calculate the following:
- Standard EPP Cost per Batch = $8,750 / 1,000 = $8.75
- Standard Batch Size = 1,000 ounces
- Standard EPP usage per ounce = 0.75 ounces
Using these values in the above formula, we get:
Standard Cost per Ounce of EPP = ($8.75 / 1,000) * (0.75) = $0.0065625
Rounding this to two decimal places, we get the standard cost per ounce of EPP as $6.65, which is option C.

Roncy Manufacturing Uses Enhanced Powder Plastics (EPP) to Manufacture a High-Pressure