Hank Itzek manufactures and sells homemade wine, and he wants to develop a stand

Question

Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 10-gallon batch. 2,500 ounces of grape concentrate at $0.06 per ounce 17 pounds of granulated sugar at $0.36 per pound 13 lemons at $0.69 each 40 yeast tablets at $0.27 each 20 nutrient tablets at $0.14 each 1,400 ounces of water at $0.005 per ounce Hank estimates that 6% of the grape concentrate is wasted, 11% of the sugar is lost, and 21% 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

Calculation of Standard cost per gallon - batch of 10 Nos Particulars Amount ($ ) 2500 Ounces of grapes @ $ 0.06 per ounce      150.00 Add: Wastage @ 6%           9.00 17 pounds of granulated sugar at $ 0.36 per pound           6.12 Add: Wastage @ 11 %           0.67 13 lemons at $ 0.69 each           8.97 Add: Wastage @ 21 %           1.88 40 yeast tablets at $ 0.27 each         10.80 20 nutrient tablets at 0.14 each           2.80 1400 Ounces of grapes @ $ 0.005 per ounce           7.00 Total Cost for 10 gallons - batch      197.25 Standard cost per gallon $         19.72

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