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Enviro Corporation manufactures a special liquid cleaner at its Green plant. Operating data for June follow: Materials $ 2,142,000 Labor 183,600 Manufacturing overhead 734,400 The Green plant produced 1,275,000 gallons in June. The plant never has any beginning or ending inventories. Compute the cost per gallon of liquid cleaner produced in June.

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Answer:

$2.40

Explanation:

The computation of cost per gallon as given below:-

Material = $2,142,000

Labor =  $183,600

Manufacturing overhead = $734,400

Total cost = Material + Labor + Manufacturing overhead

= $2,142,000 + $183,600 + $734,400

= $3,060,000

Number of gallons produced in June = $1,275,000

Cost per Gallon = Total cost ÷ Number of gallons produced in June

= $3,060,000 ÷ $1,275,000

= $2.40

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