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Question $2[6$ points$]$

NorthCo manufactures a powerful cleaning solvent. The main ingredient in the solvent is a raw material called Echol. Information

concerning the purchase and use of Echol follows:

Purchase of Echol. Echol is purchased in $20-$quart containers at a cost of $$50$ per container. A discount of $4\%$ is offered by the supplier

for payment within $10$ days, and NorthCo takes all discounts. Shipping costs, which NorthCo must pay, amount to $$400$ for an average

shipment of $10020-$quart containers of Echol.

Use of Echol. The bill of materials calls for $18\mathrm{.}0$ quarts of Echol per bottle of cleaning solvent. About $10\%$ of all Echol used is lost through

spillage or evaporation $($the $18\mathrm{.}0$ quarts above is the actual content per bottle$).$ In addition, statistical analysis has shown that every $51$ st

bottle is rejected at final inspection because of contamination.

Please make sure your final answer$($s$)$ are accurate to $2$ decimal places.

a$)$ Compute the standard purchase price for one quart of Echol.

Standard purchase price $=$$

b$)$ Compute the standard quantity of Echol $($in quarts$)$ per salable bottle of cleaning solvent.

Standard quantity $=,$ quart per salable bottle

c$)$ Using the data from a$)$ and b$)$ above, prepare a standard cost card showing the standard cost of Echol per bottle of cleaning solvent.

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