Could someone explain the solution for this question?
JC Co operates a bottling plant. The liquid content of a filled bottle of product T is 2 litres. During the filling process there is a 30% loss of liquid input due to spoilage and evaporation. The standard price of the liquid is $1.20 per litre. The standard cost of the liquid per bottle of product T, to the nearest cent, is
A. $2.40
B. $2.86
C. $3.12
D. $3.43
ANSWER:
D. $3.43
Required liquid input = 2 litres x 100/70 = 2.86 litres
Standard cost of liquid input = 2.86 x $1.20 = $3.43
(My question): What confuses me is the required input. I would think it to be 2 litres + the 30% loss in litres, then multiplied by the unit cost.
HELP PLEASE!!