Dairy Delight, a producer of premium cheese products, decides that 10 quarts of milk is to be used to produce one pound of cheese and that the price to be paid for one quart of milk is $2. The standard cost of the milk per pound of cheese is:

a. $10.

b. $20.

c. $12.

d. $8.

b. $20.

Explanation:

As the statement says that 10 quarts of milk is to be used to produce one pound of cheese and that the price to be paid for one quart of milk is $2, to determine the cost of the milk per pound of cheese we have to find the price of the 10 quarts of milk that are used to produce it:

10*$2 = $20

The standard cost of the milk per pound of cheese is $20.