Hank Itzek manufactures and sells homemade wine, and he wants to develop a stand
ID: 2511573 • 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 170-gallon batch. 2,800 ounces of grape concentrate at $0.04 per ounce 323 pounds of granulated sugar at $0.47 per pound 238 lemons at $0.71 each 340 yeast tablets at $0.26 each 850 nutrient tablets at $0.10 each 2,700 ounces of water at $0.005 per ounce Hank estimates that 1% of the grape concentrate is wasted, 16% of the sugar is lost, and 26% 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
Standard Cost per Gallon:
= (2,800x0.04/0.99 + 323x0.47/0.84 + 238x0.71/0.74 +340x0.26 + 850x0.10 + 2,700x0.005) / 170
= (113.13 + 180.73 + 228.35 + 88.40 + 85 + 13.50) / 170
= 709.11 / 170
= $ 4.17
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