Determining Standard Direct Materials Cost Agrichem manufactures Insect-Be-Gone. Eachbag of the product contains 60 pounds of direct materials. Twenty-five percent of the materialsevaporate during manufacturing. The budget allows the direct materials to be purchased at $2.50 perpound (gross cost) under terms of 2/10, n/30. The company’s stated policy is to take all availablecash discounts.Required Determine the standard direct materials cost for one bag of Insect-Be-Gone
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Determining Standard Direct Materials Cost Agrichem manufactures Insect-Be-Gone. Each
bag of the product contains 60 pounds of direct materials. Twenty-five percent of the materials
evaporate during manufacturing. The budget allows the direct materials to be purchased at $2.50 per
pound (gross cost) under terms of 2/10, n/30. The company’s stated policy is to take all available
cash discounts.
Required Determine the standard direct materials cost for one bag of Insect-Be-Gone
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