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Martin Company 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 15-gallon containers at a cost of $123 per container. A discount of 1% is offered by the supplier for payment within 10 days, and Martin Company takes all discounts. Shipping costs, which Martin Company must pay, amount to $136 for an average shipment of 100 15-gallon containers of Echol.
Use of Echol The bill of materials calls for 7 quarts of Echol per bottle of cleaning solvent. (Each gallon contains four quarts.) About 8% of all Echol used is lost through spillage or evaporation (the 7 quarts above is the actual content per bottle). In addition, statistical analysis has shown that every 41st bottle is rejected at final inspection because of contamination.Requirement 1:
Compute the standard purchase price for one quart of Echol. (Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)
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