Hank Itzek manufactures and sells homemade wine, and he wants to develop a stand
ID: 2487931 • Letter: H
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 430-gallon batch.
Hank estimates that 2% of the grape concentrate is wasted, 18% of the sugar is lost, and 32% 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.)
Explanation / Answer
Net ounces of grape concentrate is required= 3,800
Hence Gross ounces of grape concentrate is required= 3,800/98%=$3,877.55
grape concentrate sugar Cost =$ 3,877.55 x 0.01=$38.78
Net pounds of granulated sugar is required= 688
Hence Gross pounds of granulated sugar is required= 688/82% =839.02
granulated sugar Cost = 839.02 x 0.54=$453.08
Net lemons are required= 688
Hence Gross lemons are required= 688/68% =1,011.76
lemons Cost = 1,011.76 x 0.71=$718.35
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grape concentrate sugar Cost =$38.78
granulated sugar Cost =$453.08
lemons Cost =$718.35
430 yeast tablets at $0.21 each =430 x 0.21 =$90.3
2,150 nutrient tablets at $0.11 each=2,150 x 0.11 =$236.5
1,600 ounces of water at $0.007 per ounce= 1,600 x 0.007 =$11.2
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For 430 gallons cost $1548.21
Standard cost of 1 Gallon =$1,548.21/430=$3.60
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