Hnak Itzek manufactures and sells homemade wine, and he wants to develop a stand
ID: 2457462 • Letter: H
Question
Hnak Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch.
3,000 ounces of grape concentrate at $0.06 per ounce
54 pounds of granulated sugar at $0.30 per pound
60 lemons at $0.60 each
50 yeast tablets at $0.25 each
50 nutrient tablets at $0.20 each
2,600 ounces of water at $0.005 per ounce
Hank estimates that 4% of the grape concentrate is wasted, 10% of the sugar is lost, and 25% of the lemons cannot be used.
Compute the standard cost of the ingredients for one gallon of wine. (Round intermediate calculations and final answer to 2 decimal places, e.g. 1.25.)
Standard Cost Per Gallon $=
Explanation / Answer
Input output Input/output ratio cost/input cost / gallon
Grape 3000 ounces
Add for waste 4% 120 ounces
To be drawn from stores 3120 ounces 50 gallonn 62,40 ounces / gallon $0.06 $3.74
Granulated sugar 54 pounds
Add for lost sugar 10% 5.4 pounds
To be drawn from stores 59.4 pounds 50gallons 1.08 pounds / gallon $0.30 $0.32
Lemons 60 lemons
Add : for wastage 25% 15 lemonns
To be drawn from stores 75 lemons 50 gallons 1.5 nos/gallon $ 0.60 $0.90
Yeast tablets 50 nos 50 gallons 1 no /gallon $0.25 $0.25
Nutrient tablets 50 nos 50 gallons 1 no / gallon $0.20 $0.20
Water 2600 ounces 50 gallons 52 ounces/gallon $0.005 $0.26
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Total cost per unit $5.67
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Losses and wastes during production has also to be drawn from stores otherwise the output of 50 gallons would not be achieved.
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